Thursday, March 27, 2014

156- Re-Employed and Making Less: Fighting the Negative Effects of Long-Term Unemployment on Your Wages

Re-Employed and Making Less: Fighting the Negative Effects of Long-Term Unemployment on Your Wages

Re-Employed and Making Less: Fighting the Negative Effects of Long-Term Unemployment on Your Wages

New studies have shown an alarming trend. If you've been unemployed, chances are high that you will reenter the work force at 31% lower wage. If you've been unemployed for 26 weeks or more, the hit to your earning power is even greater--a whopping 67%. The study (from the Federal Reserve Bank of Boston) states that it takes up to 19 years to recover earning power comparable to peers.

Clearly workers are having to return to the workforce for less wage. And arguably, it may be better to take a lower wage offer than wait even longer for a wage closer to your previous wage. What's not clear is why the wages drop so substantially.

Some experts suspect that workers are gaining employment outside of their original field, since they can't apply their top credentials their wages are lower. Others simply cite supply and demand: More candidates for a job mean a higher supply of workers and a lower wage. Others still suspect that people out of work for a longer time may lose their edge within a field or have lost their jobs originally because they had already been less competitive.

One might be safe to assume that all of these factors play a role and if that is your assumption some steps to counter the trend may help you get employed quicker and at a higher wage. You may still take a hit in earnings, but may take less of a hit and also recover faster.

So what can you do to recover faster? Step 1: Assess the new job market. Decide where do your skills now fit best and then look at the wages in these roles. This step requires that you look at the job market and which jobs are filled quickly. It also requires that you look at the growth within that career path. So is this entry job a logical first step in your new career path.

Step 2: Look at how these jobs are filled and focus on those methods for a job search. I recently talked to a career professional in Social Work, who hadn't bothered setup a LinkedIn profile. It was an obvious miss in her career search, because so many jobs in her field are now filled through social media.

Step 3: Use this 'down-time' to develop a new credential. Even if you take only a few classes toward a new credential, it shows you are dynamic and can update your skills. This takes away an employer's main reason to not hire you--demonstrating your seriousness, preparation level, and drive. You may also find that this credential raises your self-confidence and gives you something current to talk about in an interview. 

Credentials can be earned through classes, certification, volunteer work or self study. Postings online are a much overlooked method of establishing credentials. Postings which answer questions as only an expert can do are especially valuable. Post work samples if possible to LinkedIn.

Step 4: Develop your network. Whether through social media, networking events or simple outings with friends/colleagues, expanding your network can alert you to new trends and job opportunities. Obviously, if you can get a recommendation to apply for a job that gives you a leg-up over the competition.

Step 5: Organize and put your work life into new perspective. Not only can a job search benefit from organization, but your future career direction can as well. Ask yourself: when was the last time you thought about what your career should be instead of what it is? Most of us would answer: when I was in college. That answer is not good enough if you're unemployed.

Simply put, if you want to fight up to a 61% paycut, you have to be a better job candidate than you were when you lost your job.

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