The sluggish economy turned Steven L. Grevious’ professional life upside down. From the late 1990s until the middle of 2001, Grevious earned $150,000 a year as an independent contractor in the red-hot information technology sector. It wasn’t uncommon for him to get as many as five calls a day from agencies seeking to tap his expertise in enterprise resource planning. In fact, Grevious was able to support his family on his income alone; his wife, Yvonne, a former journalist, spent her days at home raising their three children, Njeri, 7, Nkosi, 5, and Njioma, 3.
Fast forward to 2002. Companies have sharply curtailed IT budgets and are no longer willing to pay a premium for high-tech professionals. Over the past 18 months, Grevious’ downtime — the period between contracts — has risen from a couple of weeks to months. This new climate has required him to develop a creative approach to his career as well as the family’s finances.
For years Grevious had plenty of work close to his home in Stoughton, Massachusetts. But recently he has had to travel farther to find work, sometimes living out of state for weeks at a time, and for smaller contracts. Now he may travel as far as Phoenix, and Omaha, Nebraska. To make matters worse, his annual compensation has been slashed by more than 50%, and it also takes longer for him to get paid. “It’s a painful process,” says Grevious, who discovered just how badly industry veterans were suffering when he saw salt-and-pepper-haired white men lined up at an NAACP job fair this past summer.
Many of us would find it difficult to follow the path Grevious has been forced to take, having to move from region to region to earn a fraction of his once six-figure income. But these days, hordes of professionals are being forced to make such tough choices. Hundreds of major corporations — from financial services firms to high-tech companies — are slashing payrolls. At the writing of this article, there had been 1.2 million layoff announcements so far in 2002, 176,000 layoffs in October alone, according to Chicago-based outplacement firm Challenger, Gray & Christmas Inc. Whether you’re employed as an investment banker, pilot, or engineer, you’re not exempt from becoming a casualty of corporate cutbacks. And making matters worse, job creation has slowed to a crawl so it isn’t easy finding a job after losing one.
BRACING FOR A TOUGHER JOB MARKET
The situation is even more alarming for African Americans: The black unemployment rate stands at 11%, compared to the national rate of 6%. Preston Edwards Sr., publisher and CEO of New Orleans-based media company IMDiversity Inc., says African Americans are at a disadvantage because, “We’re generally the least senior [in the corporate hierarchy] and, in many cases, we’re in noncritical areas” like staffing and public relations, instead of key positions like finance and sales. According to the Bureau of Labor Statistics (BLS), African Americans hold 8.3% of the managerial and professional specialty jobs in the country, representing just 6.6% of financial managers and 3.5% of sales representatives. African American professionals, however, comprise 11.4% of the country’s personnel and labor relations managers.
Career advisors are offering hard advice for these difficult times: Take a pay cut, change industries, relocate, even consider temporary or blue-collar work. “This is one of the toughest markets I’ve ever seen,” says Stephen L. Thompson, senior vice president of Rudolph Dew & Associates L.L.C., a Los Angeles-based career management firm. “If you narrow the choices you’re willing to make, you narrow the opportunities that are available.”
But there are a few industrial and regional bright spots here and there. BLS expects a 15% increase in the number of jobs in the U.S. between now and 2010. And experts such as Sara Paynter, a job market consultant for St. Louis-based outplacement firm Lee Harris Hecht, have seen some growth in the healthcare, insurance, and food and beverage industries.
The struggle to find employment for many out-of-work professionals in depressed industries like technology, and in weakened regions like the Northeast corridor, will force job applicants to be more aggressive — restructuring résumés, networking, joining support groups, and consulting career coaches. Many will take a financial hit as they will be forced to tap emergency funds, draw on retirement savings, borrow from family and friends, or tap the equity in their homes. (See sidebar.)
Experts say professionals need to check their egos and change their job-hunting techniques. For example, broaden your network beyond industry groups or job functions. “Your colleagues are now your competitors. And don’t forget it,” cautions Laurence Stybel, president of Boston-based outplacement firm Stybel Peabody Lincolnshire. In other words, don’t employ old strategies in this tough, new world.
FROM WHITE-COLLAR TO BLUE-COLLAR
During hard times, professionals may have to consider work of any kind, putting finances first. “That sometimes means that you [have to] make a decision you would not otherwise make,” says Lisa Taylor Huff, a career coach in Mendham, New Jersey. She adds that even a low-wage job can lift some financial pressure, alleviating anxiety and possibly making an applicant more attractive to employers.
Lyndon S. James was an upwardly mobile Wall Street business consultant earning a six-figure salary — plus stock options and an annual 20% bonus. He ended up having to work in the laundry room of a residence hotel in New Brunswick, New Jersey, a job that paid about one quarter of his former salary. “Sometimes you have to swallow your pride,” says James. “If you’re as good as you think you are, you will rebound.” James was laid off from New York City-based financial services firm Capco L.L.C. in January 2002 and fortunately had a freelance consulting assignment that lasted from February to May. Then he took a series of blue-collar
jobs. He delivered newspapers and worked at a steel firm, shaping girders for bridges for a little while. Still intent on working in his industry, James continued to interview at dozens of firms, posted his résumé on Websites like Careerbuilder.com and Monster.com, and he saw a career coach.James landed the job at the Studio 6 residence hotel in New Jersey when lack of opportunity forced him to expand his job search beyond Wall Street. He quickly won over the hotel manager. “Give me an opportunity and you won’t be disappointed,” he recalls telling the manager. He began working in the laundry room of the 124-room hotel last October, performing administrative tasks and staffing the front desk as well.
James’ hotel job required him and his wife, Veronica, a pharmaceuticals project manager, to do quite a bit of belt-tightening. He had to cancel his gym membership, vacation plans, and the couple had to cut back on leisure activities like going to the movies. James was also forced to withdraw half the money in his 401(k) account, some six months after he was laid off, to maintain payments on his 2001 Ford Explorer, the mortgage on his and Veronica’s 2,700-square-foot, four-bedroom home, and other monthly payments.
His wife’s support and frequent calls from his family kept James’ spirits up. “My wife is my support network and my biggest fan,” he says. He also continued to stay in touch with headhunters and his Wall Street contacts.
About a month after he was hired at the hotel, James learned that he was being considered for the position of assistant general manager. (According to Salary.com, hotel front-desk assistants typically earn a median salary of about $20,000; hotel managers make $26,000 to $32,000.) Instead, James took advantage of another freelance consulting opportunity that presented itself in Cincinnati. The project’s pay was comparable to what he earned on Wall Street. &q
uot;I didn’t think doing laundry would be for the rest of my life,” he says. “It was just a stop on the way.”
BUYING YOURSELF A JOB
Some unemployed professionals have started their own businesses. Some ventures have been successful while others have flopped. Take Monique V. Shankle of Houston, for instance. The 39-year-old attorney holds the distinction of having been laid off twice from Enron Corp., the energy company that became notorious last year for its scandalous accounting methods. Shankle, who had earned $70,000 a year as a senior contract administrator, began looking for work a month after she’d been laid off the second time but found that Houston’s job market was saturated with out-of-work professionals. To pay bills, including the mortgage on her new house, and to take greater control of her destiny, Shankle launched her own mediation services company. Asserts Shankle: “The only way to have a higher probability of financial freedom is to own your own successful business.”
Shankle took two mediation certification courses,
spent about $700 on stationery and supplies, and $200 a month on an executive suite complete with a receptionist. She marketed her services by mailing promotional packets to civil court judges in select Texas counties. Though lawyers usually choose mediators more often than judges, she was able to build up some clientele. She has also expanded her pitch to include organizations like unions and government agencies. Business has been slow, however, and Shankle has been forced to find another job to make ends meet. While continuing to build her practice, she now works as a contracts manager for a French offshore engineering and construction company.If you’re even thinking about becoming an entrepreneur after a layoff, realize that you’re not going to have the safety net of a regular paycheck. And developing a strong business plan before you take that plunge is a must. Shankle says that she got off to a rocky start because she began her enterprise without one.
TAKING THE JOB ON THE ROAD
Professionals who have specific skills sets may have to travel across the country to find work or change industries altogether.
Take Grevious. He still likes the benefits of being an independent contractor — the autonomy, higher salary, ability to experience a wide variety of companies — but the sluggish economy has bared the pitfalls of this type of work. In addition to traveling thousands of miles to get consulting gigs, the IT professional must contend with, among other things, one-sided agreements that an employer can terminate at will. Grevious’ last contract was slated for 30 days but it only lasted a week.
Thus far the Greviouses have exhausted about $15,000 in retirement funds, but an $85,000 home equity credit line they acquired a few months ago is helping them stave off financial disaster. “We are exhausting any and all resources,” Grevious says. “Bank accounts have been drained, credit cards have been maxed.” The couple also decided to homeschool their children last year.
Grevious recently attended a program on entrepreneurship offered by the Massachusetts Department of Employment Training. The group is associated with the Service Corps of Retired Executives (SCORE; www .score.org) and offers career placement services. “I haven’t actually landed a job, but [they’re helping me] keep on the right track,” says Grevious. While still committed to IT, he is considering work in other fields and is open to relocating. Professionals can also go to their local Department of Labor one-stop center, which offers displaced workers free training, counseling, referrals, and classes on résumé construction and salary negotiation. These centers are in every state.
Some experts suggest hiring a career coach. While career coaches don’t offer job referrals, they can help you identify jobs based on your interests, build on your strengths, and sharpen your skills. Daniel Martinage, executive director of the International Coach Federation, a professional society, likens career coaches to personal fitness trainers. “Coaches
help motivate you to come up with the direct steps to achieve what you’re seeking,” he says. The group’s Website, www.coachfedera tion.org, also lists members who offer pro bono coaching.FINDING GREENER PASTURES
Leon Thomas, a 35-year-old engineer, moved his family more than 1,000 miles to stay employed. When he first heard that his company, BOC Process Plants, had been sold to another company and that his division was moving from Murray Hill, New Jersey, to Tulsa, Oklahoma, he thought “I would go anyplace else” but there. He did everything he could to find another job and avoid moving. His wife, Janice, an experienced human resources consultant, used all of her recruiting know-how to help her husband land a new gig. They sent out 100 résumés, called industry contacts, and conducted extensive searches on Websites, but their attempts were unsuccessful. “As my options started thinning out,” Thomas says, “it was Tulsa, Oklahoma, or unemployment.”
Now, just months after the move, Thomas and his wife are counting their blessings. Several of Thomas’ colleagues who didn’t relocate with the company — people with Ph.Ds and patents — are still unemployed, and his employer isn’t interested in talking to them anymore. And with Tulsa’s lower cost of living, Thomas’ salary (engineers with similar experience typically make $90,000 or more) is enough to cover the family’s expenses.
“You have to go where the jobs are,” says Thompson of Rudolph Dew. He says the employment picture is slightly brighter in the Midwest and Northwest because they traditionally have trouble attracting professionals who are typically drawn to major metropolitan areas.
The Thomases move has meant leaving behind family; but a positive change is that Janice can now stay home and raise the couple’s two children, Evan, 6, and Leah, 14 months. Says Thomas: “A lot of what we were praying for has been answered in this transition. If I had stayed in New Jersey, I’d probably still be unemployed
Maintaining Your Finances
Even if you’ve been out of work awhile, tapping your retirement money should be the last resort. You should make that decision only after money from emergency accounts, mutual funds, securities, and IRAs has been used up, says Alfred G. Osbourne, a senior financial advisor at American Express Financial Advisors in East Meadow, New York.
Furthermore, people who know they will be laid off or have significant downtime should consider some interim financial moves — before the ax falls. Securing a home-equity loan or gaining extra cash through a mortgage refinancing, especially in this low-interest rate environment, may be options. “It may be difficult to get [one] once you have no job,” Osbourne says.
Many financial planning industry groups offer pro bono advice. Chapters of the Financial Planning Association (www.fpanet.com), including those in New York (www.fpany.com) and San Francisco (www.fpasf.com), and the National Association of Personal Financial Advisors (www.napfa.org) are among them.