Frontline, the PBS current affairs series, is developing a documentary
about professionals who’ve been laid off in the economic downturn. We
are looking for people who will be willing to share their stories, from
the mundane to the profound. How were you told you were being laid off?
What’s a day in your life now that you’re a professional job-seeker?
What are your concerns? And how do you cope?
All conversations are off-the-record. We may eventually ask you to
consider sharing your story on camera, but for now we are simply
looking to speak with people who can express what they’re going
through.

Please reach out to Line Producer Ted Gesing (tedgesing AT gmail.com or
917-282-4210). Thank you.

Editor’s note: this is the second installment of Tom Bishop’s series on Applying the Lessons of a Financial Disaster.

Chapter 2 -

Business failures can be quite spectacular, like the unfortunate fireworks show now taking place in the banking, retail, construction, and technology industries. The interior workings of giant corporations are high drama when everyone is swimming in dollars. It must be unimaginable when the arrows spiral downward, dragging the wealth of every shareholder into the toilet. To those in the middle of it, the chaos must be like the fall of an ancient city under siege, or a scene from a blockbuster film.

Most businesses never get mentioned in the national media, but failures and cutbacks are just as catastrophic for the people who work for them. Most people aren’t in the upper echelons, where it is easier to see the end coming. For those of us who don’t serve in the executive suites, divining the truth is much more difficult. This chapter is about being way down in the depths of the business where you can’t see what is going on above the surface. Yet, it is still possible to figure out what is coming before it hits your desk.

Pay Attention to the Little Things

Many articles have been published about predicting layoffs, but they often avoid going into detail about the inner workings of a business collapse.It is tempting to believe that there’s a corporate media cover-up, but it is more likely that most reporters are detached from the issue, so they get some quotes from a few harried business leaders and file their haphazard fluff.

As an example, one recent article advises workers to pay attention to layoffs in their industry, recent mergers, the boss selling his car, and other fairly obvious events. While it is true that mergers tend to result in layoffs of employees of the bought company, that’s not news. With so many cutbacks and mergers going on today, we really have to dig deeper than that. Here is an example of the kind of thing workers should really notice:

I once worked for a company that offered check-clearing services to banks. The company received bags of canceled checks from the local branch of the Federal Reserve, sorted them, and sent them to the paying banks. I was a shipping lackey, tasked with rolling boxes of checks from the sorting room to the mailroom. Our clients were all small community banks that were not large enough to have their own sorting departments. In those days, the writing was already on the wall for these little banks. For our company, the writing was in the ashtray.

This was also in the days when smoking in the workplace was fairly common. I remember one night, during my after-hours shift, the big bosses held a meeting in the lunchroom, with a bunch of other suits I didn’t recognize. I only got the chance to see them when I accidentally entered the lunchroom during their powwow.

The air in that lunchroom was heavy with smoke. It seemed all eight of the dark-suited men were sitting at the long table, puffing away. I made my apologies and rolled the boxes of checks through the corridor instead. Later, after the suits had left, I finally made it to the lunchroom for a Coke. I saw two ashtrays on the table, both full of cigarette butts.

At one end, where the unknown suits had sat, the butts were only half-smoked. There were long, orange filters and at least an inch of white cigarette left over. If I smoked, I could have grabbed them and they might have lasted a few weeks.

At the other end, where our bosses were, the butts in the ashtray were smoked right down to the filter, and crumpled into little balls. I noted at the time that somebody who smokes half a cigarette must feel pretty flush, while guys who burn every last particle and then nervously crumple the butt must be somewhat on edge.

Within three weeks, our company was bought by the other, and we were all out of a job.

This won’t apply very well to today’s smoke-free workplace, but there are many other ways to divine what might be ahead. If you find yourself in any of these situations below, it is time to update your resume and prime your network. Be discreet, of course. The executives don’t want you to really know what’s going on.

1. The (Not) Ringing Phone

Salespeople tend to be pretty smart. They bear skills that are transferable across a lot of industries. A guy who sells paint for one company might sell computer parts for his next job, and medical devices after that. He will be successful in all of them. How do they always know when the getting is good, and what market to be in next?

The easy answer is that they are on the front lines. Even without advanced marketing analytics or a detailed pipeline, an alert salesperson can tell what it feels like when 30 calls a week come in, and when it drops to 5. He knows what it is like to book 25% of his proposals, and then spend a quarter or two booking 10% or 5%. He knows when he has to squeeze his margins more often to book jobs. He knows what the average sales cycle feels like at 2 months, and when it rises to 6 months.

It helps to talk to salespeople on a regular basis. Most of them like to talk. The good ones know better, but even they can reveal clues about what is going on. Some salespeople will gripe about a customer asking for a third meeting or putting off the deal for another quarter. The most upbeat salesperson will explain happily why a client put something off. Sometimes a deal gets parceled into phases or smaller lots. These things do happen, but if you hear about this more often from more than a few clients, and more than a few salespeople have the same trouble, it’s a hint.

The truth is, when sales grind to a halt, it can look like a minor slowdown unless you read between the lines.

2. Vendors and Partners

If you are lucky enough to be in contact with your vendors and business partners, you get an outside view of the company. It helps to build up a rapport with people, usually sales executives, who are either selling something to you or helping you sell something to your clients. When things are going well, and you’re all making money, you always get your calls returned. You can always get active involvement on some initiative or project.

Sometimes a partner suddenly goes into radio silence, and it’s okay to figure she went on vacation or sick leave. But if weeks go by and you see her at a trade show or other event, something’s up. You might ask why she hasn’t been in touch, and you might have to coax the truth out of her. If she talks about reviewing your preferred pricing status, that’s a red flag. You may have to ask your company’s controller why your partner hasn’t been paid, or you can patiently wait to see if the problem persists or spreads. If this happened with one vendor, it’s possible it has happened with others, and that leads to…

3. The ‘Slow-Pay’ Fallacy

If you’ve ever watched the waning minutes of a basketball game where one team is down by two buckets, you’ve seen this strategy. The losing team fouls to stop the clock, giving the other team two free throws, which are usually made. Down by three hoops, they repeat this until the clock runs out and the team loses by several points. I have never seen it work.

When a company goes into ’slow-pay’ mode, it is the same strategy. The company tries to ride out a financial crisis by paying bills on a 60-day or 90-day schedule, instead of the usual 30 days. There is kind of a triage procedure, where vendors are selected by order of importance to the company. Can they shut off the lights, stop plowing the parking lot, or hold up a major order? Is that order needed for an important project? If so, they get paid.

If the payment is for items already delivered and the vendor does not figure into immediate projects, the vendor winds up making collection calls. Sometimes a vendor will make a grave mistake and call the wrong person about collecting money. It might work like this: an accounting clerk slips up and mentions credit hold to one of your salespeople. Then all hell breaks loose and rumors spread like a crowning forest fire.

That’s when your company’s leaders get involved, and they pay the vendor to silence the rumor mill. The vendor is satisfied for the time being, but now some other bills must go unpaid, maybe the one that can shut off the lights.

This is ‘Slow-pay’. The company uses it to buy time, just like the losing basketball team, until new funding is secured (Read this as: until new suckers pour money into this sinkhole of a company). The owners are hoping for a quick decision from their white knights, one way or the other, so they can avoid burning their kids’ college funds. But investors are only another kind of customer, just more finicky. They will string the owners along until the owners have to make the decision themselves.

On that day, the company will close. ‘Slow-pay’ is a death spiral, and is a sure sign you need to polish your resume.

4. The Stock Market

As noted, investors are finicky people. Remember when Alan Greenspan could cough the wrong way and the Dow Jones Industrial Average would lose 600 points? The former Fed Chief must have loved playing Wall Street traders like his own chorus of marionettes. Similarly, we all tend to treat the daily workings of Wall Street as one-minute theater. It’s just a number reported on the news, right before they tell you tomorrow’s weather.

Most workers believe the stock market is a few steps removed from their employment fortunes, but this is increasingly untrue. Right behind the brightly-clad floor traders stand banks with their investment dollars held in numerous portfolios of publicly-owned and private companies. The stock market is nothing but a reading of where their money goes every single day. A bad day on the street can mean canceled investor meetings at the company you work for.

That’s why workers should pay attention to it with one eye on the index and one eye on your job. Know which industry took a pounding, and which experienced an uptick. Also, know why. If a company launched a product and saw a jump, that may have translated into gains for its entire sector. This is meaningless because it is a one-time affair. Similarly, if a company is about to merge, hiring a new CEO, or taking on new investors, that might carry its number up or down. This is also meaningless. The real indicators come over time, as trends.

If a company or industry is on an upswing or downswing because earnings have been reported, and these earnings are good or bad across the board, that is the kind of thing to notice. If bad earnings reports happen to be from your industry, it’s already too late. What you want to know about is a downswing in industries that include your clients. If Boeing, GE or Microsoft (all Dow components) represent a large chunk of your revenue, watch them and their industries closely.

5. Executive Behavior

You might be aware of the executives in your area of the company. If you’re in engineering, you probably report to the CTO, or to others who do. If you’re in finance, the CFO is at the top of your organizational chart. You might know their behavior, whether they are the dynamic type who are always out the door to a meeting, like to travel, like to meet everybody in the building regularly, or just like to hide in their office. Even if they (or you) are at a remote location, you know how often they answer their phone or make themselves available.

It doesn’t really matter what kind of personality your executive has. What you’re looking for is some kind of change in it. Let’s face it, your executive got to where he or she is by being hyper-competitive and probably vain. This is not a person who will trade in that shiny BMW for a Prius, and he or she will go to great lengths to hide the company’s problems from the workers.

A VP or Chief Executive who suddenly becomes routinely unavailable after years of holding weekly muffin meetings is a sign of trouble brewing. If there are levels between you and the executive, it will trickle down to your boss. Watch for the fraying edge of overwork, and not from your division’s core operations, but because of secondary procedures such as constant reporting and budget development. You will notice that your own workload diminishes as your executive finds himself too frazzled for delegation. He will be out of touch more than is normal, spend more late nights, and will avoid you when you come looking for more work.

6. Tourists

If you notice a heightened activity in unknown suits walking around the building pointing at things, it may be innocuous or something to be deadly serious about. There may be an email or announcement telling you that ‘visitors’ are coming in the next day, and that you should clear up your area and try to look nice. The next day, your executives are dressed like they’re auditioning for Ralph Lauren. That’s a bad sign.

Here’s a simple guide for these tour groups: If the tourist being shown around looks like he’s there to fix the leaky ceiling, he probably is. If it’s a vendor visit, you will peg these folks as salespeople from a mile away. But if they are clad in dark grey suits or suit-dresses, with the type of salt and pepper hair a senator might sport, and there are three or more, they are investors. And that means only one thing.

7. Under New Management

Companies often seek investment. A good CEO spends most of his time doing exactly that. Cash is king. Most of the time, your CEO can successfully ring up your existing investors and get more cash, to get through a tough time or launch a new project that everyone believes will be a smash hit. You won’t even know about these phone calls, but you will notice that the bagels in the kitchen seem to be back.

Another kind of investment, short of an outright merger or acquisition, comes in the form of new investment partners. This means the CEO and the existing board members are recruiting new blood. They aren’t doing this for fun, either. They are tapped and have to raise more money, diluting their own holdings, to keep the place running. Whenever this happens, press releases come out announcing what a great thing this is for the company and how this will allow the funding of new initiatives, hiring, and other essential changes. The good news is, it’s not a merger and you don’t have to change your business cards. But all is not well.

Think of it this way: Every time new investors enter a deal with a business, that business ceases to exist. If the deal had not been made, the company would likely have failed. And now that these white knights have saved the day, they are not going to be as silent as everyone is told they will be. This is their money on the line, and they are not as dedicated to the company’s mission as the previous majority owners might have been. They only care about its profitability.

It is a different business. One has gone under, and another has appeared, with a different culture, different people who will be favored by the new owners, and existing executives who are now treated as failures.

No matter how many press releases and company initiatives announce that everything will be exactly the same, they are lies. Before long, there will be new executives, and they will bring new people with them, and you will have to justify your existence all over again to a new set of people who do things completely differently. Even if you survive, you have lost a year or more worth of career capital. This means your next raise will be smaller and tougher to get, because the new bosses don’t know you, and do not value what you’ve done for the company that had to go looking for more money.

Putting the Signs Together

There are a lot of things that many workers never recognize until the day the layoff hits them. Paying attention to small things like cigarettes, partner rapport, bagels and visiting suits will help you know what is coming. If they happen alone, these events may be meaningless. But more than one of these small signs means you should start thinking of your next move.

Tom’s website is www.myleftone.com

Editor’s note: this is the first in a series by author Tom Bishop. You may visit his website at www.myleftone.com.

Chapter 1:

For the last several years, I have experienced just about every financial disaster that can happen to a person. You’ve heard about mass layoffs, business failures, foreclosures, and bankruptcies. Families going through these situations feel extreme hopelessness and fear, and they come out on the other end somewhat different. A lot of their experiences are common. They’ve all heard bosses say things will turn around. They’ve all heard TV pundits call them whiners. They’ve all heard friends and family tell them they were being pessimistic, that it can’t really be that bad, that they were just angry, and that they should get a grip.

I heard these words, and it chafed every time. For me, the only upside to today’s global economic collapse is that I went through my trials three years ago, and view today’s downward spiral a little differently than most. Now, I can simply point to the television and say “See? I wasn’t making this up.”

This puts me in a unique position to share what I have learned.

I don’t offer these stories as someone who has been wildly successful in business. I do not come from outside the tenuous situation a lot of workers are in right now. I come from within it.

This series will illustrate my experiences and the lessons I took from them. Everybody who has been through a personal financial disaster has something to share from their experiences. That’s why it isn’t hard to find advice that will tell you to cut back spending, find a support network, and above all, stay positive.

I don’t see the need to repeat that advice. Much of it is common sense. And as for staying positive, you will have moments of absolute despair. It is not unhealthy. It would be unhealthy not to feel desperate, given the circumstances. It is healthy to share this feeling, and not hide it, with those who are close to you. It is also healthy to feel differently about things after the smoke clears.

There really is no going back. Your new experiences will become a permanent part of your personality. We are all the sum of our experiences, good and bad. What we take from these experiences, and what positive things we can do with that information, is what matters.

I guess that’s the first lesson.

I’ll tell you about me, and what I’ve been through. Or, what my family has been through, since my wife was and is always present in these experiences. A partner is someone we need — as Susan Sarandon’s character says in “Shall We Dance” — to be a witness to our lives.

During the past decade, I have been part of at least eight startup companies. None of them became a household name or an Internet sensation. These companies were more realistic. Some continued on to become marginally-sustainable businesses, while others crashed and burned completely. All of them brought new lessons about business how-to, and how-to-not.

In this series, I will discuss:

- Run For Shelter: How to see a layoff coming

- The Perfect CEO: What personalities and backgrounds make a good business leader

- Pick a Winner: How to guess whether a company will survive a crisis

- Patching the Quilt: How to craft a sensible resume from the shards of a career

- Climbing Back: The keys to opening a sustainable business

The next few years will make or break the livelihoods of many who have been trampled by the recent economic meltdown. What government does will play a role, as will what investors and business leaders do. After that, there are social changes, global threats, and even weather events. How these affect us will be out of our hands. Our minds were never designed to worry about everything. As individuals, we should only worry about what we can control.

That’s lesson two.

This is offered in the spirit of building a better community for people in the workforce and those who are temporarily out of it. For those who are lucky enough to still be in a job, the next installment will cover the ways to see a layoff coming.

As an executive in the outplacement business for over 10 years, I’ll let you in on a little secret: Layoffs in most companies are managed by small, well trained, highly motivated teams that are sworn to secrecy. That’s because proper execution (pardon the language) and confidentiality are critical — if word got out prematurely, or the project was poorly executed (there’s that word again) holy hell would break loose. The most mobile employees (the ones every company wants to keep) would be the first to jump ship, and rumor of a downsizing destroys productivity. At least that’s what the hired downsizing consultants say.

When the layoffs are announced, employees are often taken by surprise, and they quickly learn that the company won’t value their interests over its own. This is when outplacement consultants spring into action to help traumatized employees make a quick transition from job-loser to job-seeker. Before you know it, it’s too late to get the things done you need in order for you and your family to survive. Here are my top ten things you should do at the slightest hint of a layoff. You may have a similar list — great, share it with us.

· Download that Roladex you have on company-owned computers to your personal computer at home. These contacts will prove invaluable as you conduct a job search. Yet, one of the fist things companies do is cut off computer access and confiscate company-owned equipment for terminated employees. The company has no interest in making it easy for you to regain access. Many absolutely refuse to let you back in. I have seen some notable exceptions, but do not assume your company will be among them.

· Share your suspicion or concern with a spouse or significant other. Broaching the topic early makes it easier to announce it when it finally happens. Now is a good time to begin the discussion about changes you’ll need to make because of reduced income. An acquaintance I knew in my New York days continued to commute to the city five days a week for a full six months because he couldn’t bring himself to tell his wife he had been laid off.

· Review and update all your professional memberships—another great source of contacts when looking for work. If there are professional meetings scheduled, attend them and meet as many people as you can. Be particularly helpful and seek out people who are between jobs. They will be familiar with the job landscape and may have valuable contacts that will be helpful to you. They may even know of job vacancies that for one reason or another proved inappropriate for them. They will also have long memories and recall the help you may have given them when they needed it.

· In a similar vein, renew old acquaintances—high school, college, around town, church and elsewhere. Do not assume that only contacts “at your level” will be helpful to you. Senior level people in particular make this mistake. More than a few of my most senior clients (including CEOs) got their job leads from sources much lower on the organizational pecking order.

· Get that credit card debt under control. Keep your cards but shed the debt. You’ll likely need credit later on but may be unable to qualify for enough of a credit line if you are unemployed. I have known people who shop day and night for the very best price; charge what they buy; and pay it off over time. At current credit card rates, it doesn’t take much to erase what you gained by being a “good” shopper to the interest you are charged in a single month. I am not one of those who contend that any and all debts are bad. But I do firmly believe that credit card balances make no sense at all. If you can’t pay for what you buy with a credit card when you buy it, it likely means you cannot afford it. Most credit cards have a hidden trap — when you miss a payment your rates get raised to super usury levels for what you buy next as well as on your current balance. My credit card company tried to charge me a late fee because I paid half my balance before it was due and the other half when the bill came. Their argument was that I was charge a late fee because I “failed to pay the entire balance ahead of time.” It didn’t take long to win that battle, but I wonder how insistent I would have been if I really needed that card.

· Get copies of all your personal company records. Now is a good time to collect previous performance appraisals, customer comments and position descriptions from other jobs you have held. These documents are good reminders of what you have accomplished and form the basis for your new job search. This is true even if you plan on changing careers. Future employers are still interested in what you’ve done. Don’t just confine yourself to performance appraisals. Also go after any documents that demonstrate you had company insurance. This is called proof of insurability and could be important under certain circumstances when trying to find another insurer.

· The other side of getting your credit card debt under control is to slow down on your spending and save, save, save. It is a good time to make sure you have an adequate “rainy day” fund. “Already got one,” you say? By cutting back on spending, a six month reserve can easily be converted to a full year’s supply of funds. It’s good to know how long your cash will likely last in the event you become unemployed. Also, it’s surprising how much unnecessary spending we do when next month’s paycheck is there to bail us out.

· Notice what companies are hiring or are likely to hire people with your skill set. If you know people in those companies, now is a good time to renew those acquaintances; if not, now is a good time to get to know someone.

· Follow the three-for-one rule. That’s the rule that says for every one person you contact, try and extract three additional names of people they think might give you additional information. Very quickly you will build an incredibly large network of people to call on. Good record keeping is critical to this process. Be sure and capture all relevant information — who referred you; when they did it; when you contacted them and how; what follow up did you commit to, etc. Getting in the door is easier if you can drop a familiar name.

· Check with the appropriate local or state offices who know the law regarding layoffs in your state. I am not suggesting that you make the process necessarily litigious. But it is helpful to know what companies can and cannot do. For example, in some states you can sign a release of liability form and still have time to rescind your decision. The nuances are too numerous to cover here. It is important to know what your legal rights are.

· RELAX. If you have followed the steps outlined here you’ve done more than most. Furthermore, if you have given yourself enough lead time, you will likely find work — if there is work to be found.

This last phrase “if there is work to be found,” is my way of suggesting that the economic mess in which we find ourselves is arguably the outcome of waging two wars while insisting on upwardly redistributive tax breaks in a low regulatory environment. It is the ultimate failure of public policy and proof positive there is no invisible hand that automatically converts narrow self-interests to the collective good.

I am among thousands of attorneys who believe unionization is the only way to change the unconscionable exploitation by the employment agencies and their law firm clients upon whom we depend for work. Some of us depend on this work because of the six figure law school debt incurred because the mid- and lower-rated law schools misrepresent both the employment opportunities and the income that can be earned in the market. As a result, the market is being flooded with graduates whose only employment opportunity is temporary work, namely, document review, offered through agencies which are widely suspected of engaging in a variety of illegal anti-worker practices.

Others of us are over 50 years old and out of work as the result of layoffs and downsizing. Because of our age, we are unemployable and depend on agencies for document review work. My experience demonstrates that age only adds to the extreme difficulty in obtaining even a temporary assignment — all of which, by the way, are low-paying and benefit-free.

Now, in addition to the foregoing, our cheap document review jobs (which the law firms are already marking up by 200+%) are being sent to India. As an attorney admitted in New York, I cannot even get a job in New Jersey — so how is it that my potential job can be sent to India? It is time to organize and stop this madness.

For those who don’t know, only a small fraction of attorneys earn the “big bucks.” The big money is “earned” (more accurately “made” or “stolen”) on Wall Street, not in the vast majority of law firms. The rest of us — 90% or so — are struggling just to keep our heads above water and maintain even one foot in the middle class, i.e, pay for the roof over our head and buy health insurance out of pocket. This situation is undoubtedly not confined to the legal sector and is unsustainable. It is time — past time — to organize, unionize, compel our bar associations to side with us, and put an end to this insanity.

Summer’s here, and the time is right for … or are you too overworked or too insecure about job security to take a vacation?

News of layoffs in the first half of 2007 may have contributed to your workplace collywobbles. The International Business Times lists: IBM cutting 1570 jobs; Hawaiian Airlines laying off 98 nonunion employees as part of its tactics to cut $4 million from its annual budget; Nokia Siemens Networks, the telecom equipment maker that began operations in April, laying off up to 9,000 people worldwide (about 15 percent of its work force); medical device maker Boston Scientific Corp. laying off between 500 and 600 workers; and ABN Amro bank cutting 900 U.S. jobs in 2007. Reports elsewhere remind us that Circuit City laid off 3500 long-term employees earning above the market rate, saying it would replace them with lower-paid workers; and reporting professionals themselves have been laid off at the Los Angeles Times, the San Jose Mercury News and two dailies in Philadelphia.

The Economic Policy Institute provides another view of the potential we have for banding together for power in the workplace in its June 20 posting Strong unions, strong productivity. In brief, clear language and charts, the article reaches this well documented conclusion: “The dramatic drop in unionization in the United States from 1979 to 2005 did not lead to faster productivity growth than in the seven largest European countries with union density greater than 60%.  In fact, those countries’ average annual labor productivity growth of 1.7% equaled productivity growth in the United States. … If Congress is concerned about protecting middle-class incomes, it should pass measures to facilitate union organizing and collective bargaining coverage, including the Employee Free Choice Act.  There is no reason to fear that higher rates of unionization will impede efficiency or labor productivity.”

In light of those statistics, we should seriously consider encouraging our elected representatives in Washington to support the Employee Free Choice Act (H.R. 800, S. 1041), which would “enable working people to bargain for better wages, benefits and working conditions by restoring workers’ freedom to choose for themselves whether to join a union.” The Senate began consideration of the bill on June 19.

Professionals need similar protections when we band together to ensure workplace equity. United Professionals is working for you.