Plan and Save in Case You Lose Your Job

Americans lost their jobs last month at the fastest rate in five years and that doesn’t include the thousands of financial service employees affected by the recent industry meltdown. 

Despite record level downsizing, the Spherion Employee Confidence Index surprisingly still reports that a third of all employees plan to make voluntary job changes. As such, investing in our careers may make the best financial sense right now. 

Everyone needs to start a "Career Asset Working Capital Fund." This is a specific amount of money earmarked for the unique financial requirements of career transitions. This fund should be kept separate from personal or family emergency cash reserves. 

The Career Asset Working Capital Fund should be used to fund such job/career transition needs as:
1. Skill set maintenance and development. The fund may be used to keep your skills up to date for your current or desired profession—beyond what training programs your employer may offer.  For example, information systems skills are relevant for maybe two years.
2. Schedule, employment status, or salary changes.  A Career Asset Working Capital Fund can be used to help supplement a pay cut, reduced income due to a reduced schedule, or a status shift to working as a project contractor.
3. Job changes. Nearly 300,000 layoffs were announced last quarter. According to the Department of Labor, new workers face nine job changes during the span of their career.  Some may include lags in employment; in fact nearly 20% of jobless Americans have been out of work for at least 27 weeks.   Last year Salary.com reported that 60% of job hunters were not just looking for a new job, they wanted a new career.  Yet, the Reinvention Institute reports a career reinvention takes an average three to five years to complete. 
4. Career sabbaticals. Only 4% of employers today offer a paid sabbatical. With Family and Medical Leave, jobs may be protected, but salary is not.

The amount required in a "Career Asset Working Capital Fund" depends on your type of career, salary level, job risk, job change frequency, and life transitions you may face in the future.

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