Hey, what’s going on everyone? So you start to notice the water cooler rumor mill is buzzing that a massive layoff is coming. You start to panic about next month’s rent and if you’ll get a month’s, two weeks or even two days notice.

Before you search the wanted ads and every website you can think of, take a deep breath, because you may not be laid off at all. Or, the company may be required by federal law to give you two months’ notice.

Two-Month Requirement
Since 1989, large companies in the United States have been required to let employees know 60 days in advance if there is going to be a massive layoff. This rule was enacted by the Worker Adjustment and Retraining Notification Act (WARN).

“Large Company” Qualifications
In general, an employer must have 100 or more employees working more than 20 hours each for over half of the year in order to be liable for the two-month layoff notice. Any private company is covered by this rule, whether nonprofit or for profit. However, under this rule, the government is not required to give notice to its employees.

Notified Employees
The notification requirement varies, based on whether it is a plant or location closing, if it’s a massive layoff, and the total portion of the workforce being laid off. A layoff of only a few employees will never require the WARN letter notice. A layoff of 50-499 employees who have been working for the company for more than six months is covered, as long as the exiting employees represent at least 33% of the employees at a given employment site.

For example, if a location has 200 employees, and 50 employees are going to be laid off, 60-day notice is not needed. However, if there were 66 or more employees that could lose their jobs, then 60 days notice is needed. In massive layoffs of 5,000 or more, there is not a minimum percentage, all employees must be notified.

The closing of a plant or one single location that has 50 or more workers will require notice to be given. This applies whether you are a marketing manager or a forklift operator.

How Notification Is Handled
WARN notifications are sent to unionized labor representatives for unionized employees, and individual unrepresented employees who could be subject to the layoff. For instance, if you work in a position that is unionized, such as an airline mechanic, your company just has to send notice to the union. If you work in a non-unionized management position, you are required to get an individual letter.

Exemptions
Exemptions are provided for such acts as natural disasters and “unforeseeable business circumstances.” For instance, if a tornado hits an office building, your company will not have to give you notice that your job is lost. There’s also the figurative tornado of a major client unexpectedly terminating their relationship. For example, if you make student desks and the school district the company makes most of your desks for cancels its orders.

While “unforeseen business circumstances” are considered a reason to avoid the 60-day notice rule, it is not considered a reason to give no notice. Employers are still required to give as much notice as possible.

Exempt Employees
If you are an independent contractor or a temporary employee, you will never be required to be given notice. Thus, it’s more important for you to gauge the possibility of a company closure or layoff, whether or not a WARN letter will go out.

Places to Find the WARN Letter List
Certain states do post which companies are undergoing layoffs You can find links to many states on the Oklahoma Department of Commerce’s Web site.

Wake Up Call
Perhaps now is also a time to shape up, or get shipped out. Get a free trial of GroupReady scheduling software. Used by thousands of offices, this easy to use software lets multiple people work with the same schedule at the same time – and see each other’s changes instantly. Doesn’t require Exchange Server and can also be accessed through a web interface. Implement this in your office and make the head honcho think twice about giving you the axe.

Conclusion
Trying to predict whether your company will have a massive layoff can feel like trying to predict an unexpected rain storm. However, WARN letters can act like a trusted and accurate meteorologist. If you work for a large company and aren’t an independent contractor or temporary employee, watch for WARN letters before panicking about finding a new job or paying next month’s rent. You can use the two months you have, once warned, to find a job and set aside money until you get your next job.

Stay tuned for more updates.

Hey, what’s going on everyone? One of the most unpleasant tasks a business owner or manager must face is having to terminate one or more employees. No matter the cause for dismissal, telling a worker that his or her services are no longer required is a difficult statement to make. You may cushion the blow with praise, you may justify it with numbers, or you may cite the worker’s poor performance as the reason, but no matter what you say to the fired employee and no matter how you explain it, the end result can be devastating to both parties involved.

For the worker, it means the end of regular income and probably the termination of company health benefits, a 401(k) and other perks of the job. For the owner, CEO, or whoever announces the dismissal, it could mean firing a trusted, well-performing worker (or several of them) in a desperate means to cut costs. It won’t be easy, but there are best practices. What so many successful CEOs, human resources leaders and senior managers have advised when laying-off an employee is simple: be honest, be compassionate and be quick.

Wielding the “Ax”
Even if the cause for termination is based on an employee’s poor work performance, or for some reason other than a need to cut personnel, firing a human being, telling them, in effect, that you no longer value them, is a psychological and financial trauma for the person let go and can be a psychological trauma for whoever swings the ax. There are ways, however, to make it easier for all concerned. Following these well-established general criteria for whom to dismiss, how to do it, and what – if anything – to provide to the person or persons dismissed will help ease the process.

Before we discuss how to lay someone off, deciding whom to lay offis equally important. It is also important to consider the circumstances of the economy, the company doing the dismissal and the financial condition of the company in question.

Assuming the economy is good and the company is profitable, there may be several reasons to terminate an employee.

For poor performance, including lack of punctuality, absenteeism, or failure to produce desired results
For resisting change
For negativism
For insubordination
For not conforming to company values
For questionable character or ethical lapses
For criminal acts

However, in a poor economy, decisions about whom to fire and why may be decided using other criteria. The employees marked for termination may include the following:

Higher salaried employees
Newly-hired employees

The lower 10% on the work performance scale, a group Jack Welch, former CEO of General Electric (NYSE:GE), often terminated – in both good times and bad. (For more on this great CEO, see You Don’t Know Jack Welch.)

Employees nearing retirement and/or older employees. Employers should note that terminating older employees may present a risk of age discrimination lawsuits, either individually or as part of a class action suit, so caution must be exercised in this category. It may be advisable to obtain legal advice before terminating employees in these two categories.

Layoff Best Practices
The “three be rule” is your best guide to the termination process when it comes time to tell the employee.

Be honest: Tell the employee why he or she is being laid off, even if it’s for poor performance. You’re not doing the employee or yourself any favors by concealing the reason. You may cushion the poor performance assessment in a variety of ways, but the truth must be told. For any layoffs due to poor performance, a recent record of poor performance reviews will support your decision and justify it to the employee. It may also be used as evidence if a wrongful dismissal suit is filed against the employer.

Be compassionate: Being laid off can be painful. Show the terminated employee some compassion and understanding. If your firm has the capability, provide outplacement services or job counseling to help cushion the blow. Keep the employee’s ego in mind – it may need a hefty boost at this time, and you can provide it by praising previous accomplishments.

Be quick: A quick, surgical dismissal, while keeping the above recommendations in mind, is the most humane way to handle a layoff. You may want the employee to clean out his or her desk that day and it may be a good idea to have security escort the employee to the door. Too many terminated employees have taken out their sense of injustice or lust for revenge by sabotaging their computers or attempting to hurt their managers and colleagues. Being escorted to the door can be a humiliating experience for the terminated worker but it can prevent destructive expressions of rage. Dismissing an employee on a Friday afternoon is also an effective means of allowing the terminated worker an entire weekend to recover from the shock of dismissal.

What Not to Do
The manager doing the firing should never express anger, express too much disappointment, or threaten to imperil the fired employee’s chances. Depending on circumstances, you may want to tell terminated employees that they might work as outside consultants, as part-time employees without benefits, or that they may be hired back at a later date, when economic and financial conditions warrant it. That said, employers are urged neither to make promises of any kind, nor to make statements that can be interpreted as promises.

The Bottom Line
Laying off staff can be a painful experience for both the laid off worker and the employer who issues the pink slip. Beyond the loss of income and whatever other benefits the employer provided, the laid off worker often feels a loss of self-esteem. For the employer, the experience of laying off a worker may be equally uncomfortable, although in a different way.

Both of these painful consequences seem inevitable, but both can be reduced in intensity if the employer follows the “three be rule” cited above and determines judiciously who should be terminated. In the situation of a mass layoff, a standardized package may be offered, in which case an employer is less likely to deviate from the severance offered. But in many other cases, severance can be negotiated.

Stay tuned for more updates.

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Hey, what’s going on folks? During periods of recession, millions of Americans become victims of the inevitable workforce attrition that results from slumping sales and reduced cash flow. Personnel in the financial industry can be hit particularly hard, especially those who are in sales. But there are a number of things that financial planners and brokers can do to make themselves more valuable to both their employers and their clients.

1. Be Sure to Communicate
Regardless of whether you are an independent adviser with your own practice or an employee of a brokerage firm with your own clientele, staying in close touch with your customers is essential for your professional survival. In times like these, your customers are being bombarded on a daily basis with negative financial news from the media, their friends and relatives, and most likely their own emotions. This is when your input is needed the most, and failure to give it can easily result in the loss of your client to someone who will.

Don’t wait for the phone to ring; create a letter addressing current market events and send it out. Find out what your clients think of current market conditions and the performance of their portfolios. Make every effort to help them see the current market from a long-term historical perspective. The most successful planners are the ones who are able to make their clients and prospects understand that when items are severely under-priced for their values, it may be the time to buy.

2. Adjust Portfolios
Although communication is vital, your ability to control your clients’ losses during a severe market downturn can be the deciding factor when it comes to customer retention. The judicious use of puts, option collars and other hedging strategies can make a huge difference in the numbers that show up on your clients’ monthly statements.

Long-term strategies such as periodic re-balancing and dollar-cost averaging will also aid in keeping your clients’ investment objectives within reach. Clients with depreciated holdings in taxable accounts can benefit from tax swaps, which can generate a consolation prize of capital losses that can be used to offset capital gains or income.

3. Earn a Professional Designation
The media has been telling the public for years to seek stockbrokers, financial planners and insurance agents that have earned professional designations, such as the Certified Financial Planner (CFP), Chartered Mutual Funds Counselor (ChFC) and Chartered Life Underwriter (CLU). Although there are many other designations pertaining to specific areas of specialization, these three are among the most widely known to the public.

Many fee-based advisers carry the CFP designation as their mark of expertise, and this is the primary designation that has been endorsed by the media. But these credentials can serve both you and your clients in many ways, as they will enable you to spot more planning opportunities and increase your professional competence. Employers in the financial arena tend to look favorably upon employees who earn these credentials, and carrying these certifications will almost certainly make you a more valuable employee. Remember, it often takes money to make money, so if you have to invest in something to succeed, why not invest in yourself with an education?

4. Be Willing to Offer Discounts or Extra Services
Losing money in a bad market is disheartening enough for your clients; making them pay fees and commissions on top of that is even worse. Of course you still have to make a living, but offering discounts and/or free services to your clients can be another source of consolation for them. If nothing else, it will show that you are willing to take some losses along with them.

A 25% discount in fees or commissions can do wonders to placate day traders, while free services such as income tax preparation or estate planning consultations can save your customers money, provide them with a substantial benefit and unearth new planning opportunities for your business.

5. Be Flexible and Proactive
Employees who keep a good attitude and volunteer for unpleasant tasks will always have a better chance of keeping their jobs than those who complain and shirk their responsibilities. However, attitude alone has seldom provided real job protection. The willingness to take business trips and transfer to another location may keep your employment on surer footing, and a willingness to work overtime performing tasks that no one else wants to do can elevate your status among your superiors.

Don’t underestimate the impact of your willingness to go the extra mile when layoff notices are being decided upon.

6. Keep Your Options Open
If you feel like there’s a real chance you may get the ax, don’t wait until a pink slip shows up on your desk before taking action. Update your resume and start talking to other employers now. Consult with your clients off the record to see how many of them will be willing to leave with you if necessary.

Also don’t hesitate to join a local professional organization such as the Financial Planning Association or National Association of Insurance and Financial Advisers, which can offer you many resources in your job search, and many contacts to help you grow in your profession.

Bottom Line
Both employees and independent financial practitioners can do many things to improve their job security. Client communication, loss mitigation, discounts and extra services are just some of the measures that can be taken to improve your standings with your clients and supervisors. But having a “Plan B” in place is essential in an uncertain job market where a good attitude and the willingness to work overtime may not make a difference.

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Stay tuned for more updates.

Hey, what’s going on everyone? In a very sluggish economy, people should generally try to watch their spending and not take any business risks that might put their future financial goals in jeopardy. I hope you guys can benefit from the following tips.

Becoming a Cosigner
I know I’ve mentioned this in past posts, but cosigning a loan can be a very risky thing to do even in flush economic times. After all, if the individual taking the loan doesn’t make the scheduled payments, the cosigner could well be asked to make them.

However, during an economic downturn the risks associated with cosigning a note could be even greater as the person may be at greater risk of losing his or her job and the means to pay down the loan. Also, the cosigner is more likely to land in the unemployment line as well.

Getting Into an Adjustable-Rate Mortgage
When purchasing a home, some individuals may choose to take out an adjustable rate mortgage (ARM). In some cases, this move might make sense. After all, as long as interest rates are low, the monthly payment will be low as well.

However, what if the individual were to be laid off and interest rates were to rise as the recession or slowdown started to abate? As rates rise, the monthly payment may go up. In such a case, the homeowner may find it extremely difficult to come up with the money to make the payments.

Adding Debt
Taking on new debt may not be a problem in good times if the individual makes enough money to cover the monthly payments. However, what happens if the individual’s livelihood is adversely affected in the midst of the economic turmoil? What happens if the borrower is laid off?

In many cases, recently laid off individuals may have to take jobs that pay less than their previous salaries just to make ends meet and to keep money coming in the door. Unfortunately, the new income may not be anywhere near the amount they had previously earned. When this happens, savings can quickly dwindle away.

Taking Your Job for Granted
During an economic slowdown, it’s important to understand that corporations, even large ones, may be under financial pressure. And when that happens, many companies will try to reduce expenses any way they can. In some instances, that may mean scaling back on company functions such as holiday parties, but in other cases, companies may cut the dividends they pay, and sometimes companies will cut jobs as a means of saving money.

Because the employment situation during a recession may be so fragile, employees should generally try to do all they can to make sure their employer has a favorable opinion of them. This may mean coming to work early, staying late and of course doing top-notch work at all times. While there is no guarantee this will save your job, it could make you important enough to your company to ensure you’re kept on the payroll.

Taking Risks With Investments
Business owners should always be thinking about the future. They should always be thinking about new and exciting ways to grow their businesses. However, an economic slowdown may not be the best time to make risky bets.

For example, taking on a new loan to add physical floor space or to increase inventory, or otherwise add to the business may sound good. But what if the business was to slow down?

However, small investments can add up. For example, if you have a web based business, being listed in a business web directory like Jasmine Directory, would be greatly beneficial.

They are 100% SEO friendly, W3 css and HTML valid, generate you an automatic thumbnail, and five deep URLs. Combine the business listing with a few other smaller investments and you get a significant boost at less cost.

Bottom Line
Individuals may not need to live a monk’s existence during an economic slowdown, but they should pay extra attention to their spending and budgeting, and be wary of taking any unnecessary risks.

Stay tuned for more updates folks.

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Hey, what’s going on guys? What do you do when you see a family member becomes unemployed? Or about to invest foolishly in real estate? How do you respond when you know that he or she won’t be able to pay their bills? Let’s take a look at a few options you can consider to help your family members in trouble, without hurting yourself financially.

1. Give a cash gift.
Of course, this is the least effective because if someone is not financially responsible, giving him or her cash will actually be detrimental. That being said, if your loved one is having a short-term cash flow problem, decide how much you can afford to give, without putting yourself in financial jeopardy, and then either give the maximum amount you can afford all at once or perhaps give smaller gifts on a periodic or regular basis until the situation is resolved. Make sure it’s clearly understood that the money is a gift, not a loan to be repaid, so you don’t create an awkward situation for the gift recipient.

2. Make a personal loan.
Your family or friend may approach you and ask for a short-term loan. Talk frankly, clearly write out the terms of the loan on paper, and have both parties sign it. This helps both parties be clear on the financial arrangement they’re entering into.

3. Co-sign on a bank loan.
Before simply saying “yes” and essentially lending someone your good credit, it’s important to realize that there are legal and financial implications to co-signing on a loan. The most critical thing to understand is that you are legally binding yourself to repay the loan if the other borrower fails to do so. The lender can take legal action against you and require that you pay the full amount, even if you had an agreement between you and your family member that you would not have to make payments. This delinquent loan will also now affect your personal credit. So if your friend fails to make payments on the loan on time and in full the lender can report the negative account activity to the credit bureaus to file on your credit report which, in turn, can lower your credit score.

4. Create a budget and help create a bill-paying system.
Often, people in a financial crisis simply aren’t aware where their money is going. If you have experience using a budget to manage your own money, you may be able to help your family in creating and using a budget as well. To break the ice you may want to offer to show them your budget and your bill-paying system and explain to them how it helps you make financial decisions. As you work together to help them get a handle on their financial situation, the process will point out places where they can cut back on expenses or try to increase their income to better meet their financial obligations.

5. Provide employment.
If you’re not comfortable making a loan or giving a cash gift, consider hiring your friend to assist with needed tasks at an agreed-upon rate. This side job may go a long way towards helping them earn the money they need to pay their bills, and help you finish up any jobs that you’ve been putting off. Treat the arrangement like you would any other employee; spell out clearly the work that needs to be done, the deadlines and the rate of pay. Be sure to include a provision about how you’ll deal with poor or incomplete work.

6. Give non-cash financial assistance.
If you’re uncomfortable or unwilling to give your friend cash, consider giving non-cash financial assistance, such as gift cards or gift certificates. You’ll have more control over what your money will be used for and you can easily buy gift cards in varying amounts at most stores. Of course, he or she can always sell those and buy whatever he or she wants. But if that’s the case, he or she has more serious problems that you probably could not help with.

7. Prepay bills.
You may want to consider prepaying one or more regular bills for your friend to help them during their current financial crunch. Offering to do something, such as paying their car payment may help them avoid a short-term crisis and give them the little extra time they need to work out of their situation.

8. Help them find professional assistance and local resources.
You simply may not wish or be able to provide your family member with financial assistance or hands-on help. But you can still play a key role by helping them find local professionals that can steer them in the right direction. Consider referring them to a well known career counselor, welfare agency, credit and debt counselor, or even a lender who can provide short-term solutions.

Friends, family and money aren’t always a good mix. But, in tough economic times or when faced with unexpected emergencies, your loved ones may truly need your financial assistance. Before you commit to helping, be sure to think through what you can and can’t afford to do. Remember, if your own resources are limited, there are other meaningful, effective, and creative ways to help.

Stay tuned for more updates.

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