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

  • The Surprise Science of Gift Wrapping

    The Surprise Science of Gift Wrapping

    December 21, 2021
    They say appearances can be deceiving. In the case of gift giving, they might be right. Consumers in the U.S. spend billions of dollars a year on wrapping gifts, in most cases to make their presents look as good as possible. This includes money spent on paper, boxes, ribbon and pretty bows. While some people […]
    Read this Article
  • What Do You Really Know About Bear Markets?

    What Do You Really Know About Bear Markets?

    September 4, 2022
    Historical bears, bulls, crashes, rallies, corrections, and recessions – how do they all fit together for investors? And is there a typical duration of time for a bear vs bull market? This article provides the history and context for what typically defines the many inclinations of the market. Even discover why the terms “bull market” and “bear market” are used.
    Read this Article
  • Two Steps Forward and One Step Back

    Two Steps Forward and One Step Back

    March 3, 2023
    With a recap from Mid-November to Mid-February, it’s good to see numbers in the green as our Strong Valley advisor team discusses stock performance and bonds. Answering the top three questions from clients: Why doesn’t my banker call me about higher rates? How to best set up banking and investment accounts to work together? and the big one – What about the recession? the team gives insight into preparing for the 2023 recession. We wrap up with predictions for the coming quarter and how the market as a leading indicator plays an important role.
    Read this Article
  • What's Driving the Market

    Podcast Highlight - New Defined Contribution Plan Limits

    March 12, 2023
    The team shares insights about how the new Defined Contribution limits for plans like 401k, IRAs, and Roth IRA could affect you. Also included is an update on exciting news for small business owners and their employees regarding Roth IRAs.
    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