Is your salary putting you at risk of redundancy?

As the weeks go by we hear of more redundancies and predictions that millions will lose their jobs due to Covid-19. Some sectors are riskier than others—those working in the non-food retail industry, for example, have reason to be scared—but what if it is your high salary that makes you feel vulnerable? Are you worried that your employer might seek to make quick and high savings by targeting those in your salary bracket?

Every day there is a tally of companies making redundancies and closing outlets, while predictions about the millions set to lose jobs come from all sorts of Government and economic agencies.

The hardest hit sectors are those with the greatest human contact, including restaurants, hotels, airlines, and the arts, according to a report by the London School of Economics. The report also found that 60% of businesses predicted they would reduce employment in the three months from June 2020.

Office of National Statistics data shows that the highest-paying jobs are various management roles, professions such as doctors and lawyers, air-traffic control and certain IT positions. One reason companies pay high salaries is because they want to retain staff. You might naturally fear that it works the other way around too: that if the company needs to make cuts, they might look at where to make the quickest, biggest savings.

What does your high salary mean to you?

Distressing events such as losing a job are known as living losses: they don’t involve death but they still involve an ending with a grieving process. Naturally the extent of the loss depends on how much you like your job and also where it leaves your sense of identity: to what extent does your job make up who you are or how you see yourself?

High salaries are often equated with status. A High Court judge is unlikely to be paid the minimum wage, just as a PAYE shop assistant is probably not going to be able to ask for £200 an hour, therefore wages are connected to financial worth, which leads to them being associated with your own worth and value. Taking this train of thought, it follows that if you are unemployed, then you are almost worthless. That is not true, of course. Every human being is worth the same as the next one, whatever they earn. Associating high pay with your personal worth can make the prospect of losing that money all the more difficult.

Your high salary also probably represents security. It feeds and houses yourself and your family. Beyond that, it offers a certain lifestyle and, perhaps, access to a social circle.

What do you have to lose?

Status, security, a social circle, and lifestyle are certainly difficult to let go. The extent of the loss can be due to a number of factors:

• The importance of prestige and status to you. How much is it part of your identity?
• How a lucrative career is viewed in your family. Were you the first to achieve such heights? Was there a lot of pressure put on you to “succeed” or were you expected to carry on the “tradition” and follow generations of high-flyers? Or maybe you are an anomaly in a family that reveres those who struggle in more artistic, creative jobs? Perhaps there were money worries in your family and it was equated with security.
• The impact it will have on your lifestyle. To fit in with family and friends, maybe you need to be a high earner so you can join them for dinner in Michelin-starred restaurants and hang out on the slopes of St Moritz. Indeed, if you have adopted a lifestyle to fit the salary—high mortgage, children at private school—then it can be even more daunting to lose the money.

What to do next

If you fear you may be about to lose your job, start taking action now, even if that just involves thinking about what you might do in the future.

1. Unlock the golden handcuffs

High salaries and generous benefits are known as golden handcuffs because they can keep people in jobs they don’t like. As you fear your job coming to an end it could be time to step back and think: do you actually like your job? Has the salary been keeping you there? Redundancy might actually be the push you need to move on. A recent report found that more than 70% of UK workers are reassessing their career in light of the Covid-19 pandemic—perhaps you are among them.

2.Face your fear of the unknown

Realize that your fears could be unfounded. “On average, employees overestimate the chance of losing their job; while they underestimate the difficulty of job replacement,”write Andy Dickerson and Francis Green in their research paper Fears and Realisations of Employment Insecurity.

Sadly, such thoughts can also affect your health. Sarah A Burgard et al wrote in their paper, Perceived Job Insecurity and Worker Health in the United States, that “Results show that persistent perceived job insecurity is a significant and substantively important predictor of poorer self-rated health … and of depressive symptoms. Job losses or unemployment episodes are associated with perceived job insecurity, but do not account for its association with health.”
This shows that while the fear of losing your job affects your health, actually losing your job does not—although it does make you feel insecure.

This shows that while the fear of losing your job affects your health, actually losing your job does not—although it does make you feel insecure.

3.Dealing with fear of future

In a job you have the security of a career and money—there is a path to follow. Outside it, you have little idea of the future, which is scary. The unknown is our greatest fear and can lead to frustration, stress, and the inability to take action.

Certainly, feeling that you have no control over a situation can add to stress, so be aware of how you are thinking and of any thoughts that there is nothing you can do. Even if you feel hopelessness and inertia, push through.

4. Do a little self-therapy

It is time to ask yourself some existential questions and look at what makes you “you”. What makes you happy? When were you most happy? What are you passionate about? What did you want to be as a young child? Think of the times, perhaps at college, when you might have rationalized and taken a safe, sensible option by seeking a solid, high-paying job. If life is going to be very different it might not mean that it will be worse.

Take Jan McCourt, who was made redundant from a high-flying job in the City and took up farming with his wife. He told Management Today magazine that: “At the time, the redundancy seemed a terrible blow but with hindsight, although we still struggle financially, it was the best thing that could have happened. The big advantages are spending more time with the family, having control over what I do, and feeling part of the real world.”

5.Manage your money

Check out your finances and look at how you could adapt your life to suit less income. Start now by reducing your outgoings and seeing what it’s like while you have the cushion of a job. Build up savings—that’s one bonus of a high salary—and pay off any debts.

6.Think about your next career move

Keep your skills up to date by looking online at what is happening in your industry, networking, liaising with colleagues, and perhaps signing up for a course. Also look at other areas you may be able to work in. If you are applying to varied jobs, tailor your CV to the different roles. Check out what redundancy payments are likely to be and whether you could use one to start your own business.

7. Find support

Talk to family, friends, and any colleagues in the same boat. Their support will help you realize that there is life after redundancy; that you would still be accepted by those who matter even if you feel rejected by your workplace.

While your fears may be realistic but unfounded, this is a good time to think about your future by financially preparing for the worst, but also by thinking about how your life could be different in a way that suits you.

Photo: Welcome to the Jungle

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