Article

Career Advancement vs Job Security

Changing jobs can be a difficult decision, but it can also be a great opportunity for growth and advancement in your career. However, when companies do layoffs, it can be a stressful and uncertain time for employees. Here are some ideas to think about when balancing the Pros and Cons of changing jobs.

April 6, 2024
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

Changing jobs can be a difficult decision, but it can also be a great opportunity for growth and advancement in your career. However, when companies do layoffs, it can be a stressful and uncertain time for employees. One question that often arises during layoffs is whether the practice of "last in, first out" (LIFO) is used.

LIFO is a method of layoffs in which the last employees hired are the first to be let go. This method is often used because it is seen as the most fair and objective way to determine which employees will be laid off. The idea is that the employees who have been with the company the longest have had the most time to prove themselves and make valuable contributions to the company.

However, some critics argue that LIFO is not always the best method for layoffs. For example, if a company is trying to reduce costs by cutting staff, it may make more sense to let go of the highest-paid employees, regardless of how long they have been with the company. Additionally, if a company is trying to streamline its operations, it may make more sense to let go of employees in less essential roles, regardless of their tenure.

Another method of layoffs that is sometimes used is "first in, first out" (FIFO), in which the first employees hired are the first to be let go. This method is often used in unionized workplaces, where the seniority of employees is a key factor in determining layoffs. However, like LIFO, FIFO can also have its drawbacks.

For example, if a company is trying to reduce costs by cutting staff, it may make more sense to let go of the highest-paid employees, regardless of how long they have been with the company.

In addition to LIFO and FIFO, some companies may also use a "performance-based" approach to layoffs. Under this method, employees are evaluated based on their job performance, and those who are performing poorly are more likely to be let go. This approach can be beneficial in that it ensures that the company is retaining its best employees, but it can also be difficult to implement fairly, as performance evaluations can be subjective.

It is worth noting that there is no federal law mandating how employers must conduct layoffs. It is up to each individual company to decide the best way to proceed. Some states, however, have their own laws or regulations that employers must follow when conducting layoffs.

Layoffs can be a difficult and uncertain time for employees, and the method used to determine who will be let go can have a big impact on how fair and objective the process is perceived to be. While LIFO and FIFO are the most common methods used, performance-based approach and other methods are also used in some companies. Ultimately, it is up to the individual company to decide the best way to proceed, but it is important to consider all the options and their potential consequences.

Other content you may like

  • Financial Anxiety is a Big Sleep Thief

    August 10, 2024
    In an era of unprecedented change and economic volatility, the sleepless nights associated with financial concerns are becoming all too familiar. Despite an overall confidence in their financial well-being, many are grappling with anxiety about money that permeates various aspects of their lives. Navigating the Storm: Coping Strategies To navigate the anxiety storm, there are […]
    Read this Article
  • Dynamics of a Rolling Recession

    Dynamics of a Rolling Recession

    September 13, 2023
    Essentially, a rolling recession is a localized downturn that hits specific areas of an economy while others remain robust. They can be challenging for investors, as well as offer opportunities. Here are tips on how to understand a rolling recession, or sometimes called a rolling bear market, and navigate the economic environment with financial resilience.
    Read this Article
  • Career Advancement vs Job Security

    April 6, 2024
    Changing jobs can be a difficult decision, but it can also be a great opportunity for growth and advancement in your career. However, when companies do layoffs, it can be a stressful and uncertain time for employees. Here are some ideas to think about when balancing the Pros and Cons of changing jobs.
    Read this Article
  • Saving for Retirement Through 403(b) Plans

    Saving for Retirement through 403(b) Plans

    November 15, 2022
    One of the simplest options for nonprofits wishing to provide employees with access to a tax-advantaged retirement plan is the 403(b) arrangement, which can be attractive due to tax laws. Over the years, the tax laws have been amended to bring 403(b) plan features more into line with those of 401(k) plans, but this article discusses important differences that remain.
    Read this Article
  • The link you have selected is located on another server. The linked site contains information that has been created, published, maintained, or otherwise posted by institutions or organizations independent of this organization. We do not endorse, approve, certify, or control any linked websites, their sponsors, or any of their policies, activities, products, or services. We do not assume responsibility for the accuracy, completeness, or timeliness of the information contained therein. Visitors to any linked websites should not use or rely on the information contained therein until they have consulted with an independent financial professional. Please click “Continue to Link” to leave this website and proceed to the selected site.
    phone-handset