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Wednesday, December 1, 2010

my organization has a budget shortfall; should I be job-searching?

A reader writes:

Thanks to your amazing advice and great "how to get a job" book, I landed a position in the development office of a small non-profit organization that does the kind of work I really believe in. It was truly a step up from where I was -- a more than $13k raise, more opportunities to be creative and, best of all, appreciative and respectful coworkers. I've been here just about two months and in that time have written a (so far) well-performing year-end appeal, spearheaded upcoming anniversary projects, received lots of positive feedback and, in general, made a difference.

At our last staff meeting, the executive director dropped a bomb that we're down $100,000 from where we need to be at this point, due to several grants that did not come through earlier this year. She mentioned cut-backs on spending and furloughs, but nothing specific yet.

My question is -- should I be looking for another job? I feel that, as the newest person, I'd likely be the first cut. I only understand furloughs to be company-imposed "vacations" with no you have any more insight than that? Also, since I've only been here two months, I'm worried how that would look to potential employers (I was at my previous job, my first after college, for nearly three years). Is a furlough an acceptable reason to look for another opportunity, or will I be seen as disloyal?

First, thank you. I will totally take credit for you getting your job.

Furloughs are mandated periods of time off without pay. They're often used when an employer needs to make up a budget shortfall but wants to avoid outright layoffs. They're usually for a week or two, although occasionally they're longer. If doing furloughs means that the employer truly does end up being able to avoid layoffs, they can be a very good thing (in terms of potentially solving the problem). 

The bigger issue on my mind, though, would be whether this actually signals bigger problems beyond your current $100,000 shortfall. What I would want to know is whether furloughs and other cutbacks are going to solve the problem, or whether the organization is likely going to need to look at layoffs down the road. (By the way, I don't know how big your budget is or how small your organization is, but $100,000 might be perfectly easily made up with cuts other than layoffs. But I'd want to know if this indicates you're on a downward funding trajectory more generally or if this is likely the extent of the damage.)

If there are going to be layoffs at some point, don't assume that you're the most vulnerable just because you were hired recently. An effectively run organization is going to pick positions to cut based on which positions are most expendable, i.e. least essential to the core work of the organization. If your position is key to the organization's work, it doesn't make sense to cut it, no matter how new you are ... at least not as long as there are other positions that are less essential. (An organization may also take this opportunity to cut lower performers, although really, they should have been dealing with them long before this anyway.)  An exception to this: Even if your position is essential, it's possible that if they need to eliminate a less-key position that's held by a long-time and/or fantastic staffer, they could cut that person's position and then move her into yours (assuming it's a reasonable fit), thus resulting in you being laid off to open up the spot.

This is all speculation though. My point is just not to assume anything, because there are lots of possible ways this could go (including no painful cuts at all).

Now, what's your relationship like with your manager? Unless it's terrible, the best thing you can do here is to sit down with her and talk about this. You're in development (that's fundraising for readers who are unfamiliar with nonprofit terms), so start off by talking about what extra fundraising work you might be able to do that could help. Then, say something like this: "I would feel naive if I didn't ask this next thing. I know that as a recent hire, my position might be high on the list to cut if it comes to that. I completely understand that there are no guarantees whatsoever and that these things can be hard to predict, but I'd so appreciate any insight you can give me about the security of my position should layoffs end up being necessary, or about how those decisions would be made."

Even if you don't get a solid "yes, you'd be an early cut" or "no, your position is essential" or even "I don't know, but I do know there are three positions we'd cut before we even looked at yours," you still have  a good chance of getting additional information that will help inform your thinking. And particularly because you're in a small organization, you have pretty good chances of getting a fairly candid answer, rather than the opaque responses that large companies often give people.

Then, follow this up by saying how much you love your job and are thrilled to be there, but ask that you be given the earliest possible heads-up if it does start looking like your position might need to be cut. (But also don't assume you'll get that. There are a lot of concerns that go into managing layoffs well, and employers don't always do it perfectly.)

Then, no matter what you learn in this conversation, it wouldn't be a terrible idea to do some looking around at other opportunities. You don't need to take another job if it turns out you don't need to, but job searches can take a while and if the worst does happen, you'll be glad that you got a head start. So send out some applications, but think of it not as a "real" job hunt but as more of a safety net in case you end up needing one. 

And when talking to prospective employers, I wouldn't say that you're looking because of furloughs in particular; I would be more general and say that you're looking because the organization is in a rocky financial period and you're concerned about the stability of your position. Hopefully this is true, right?  You wouldn't be leaving because you had to take a week off without pay, but rather because of the larger concerns that raises about the organization's financial stability. This will make sense to employers and you don't need to worry about being seen as disloyal (although I think you might if it were really just confined to the furlough).

Last, I want to stress that all of this is just about being prepared. For all we know, your organization isn't going to have a single lay-off, funding will be back where it needs to be next year, and you're going to go on enjoying this job for many years. 

A lot of nonprofits go through this. The best way to handle it is to gather information, make sure you don't have your head in the sand, and create a safety net for yourself in case you need it, but not be scared off prematurely. Good luck!


Anonymous said...

The "last hired first fired" rule is common in union jobs like teaching; everyone has the same job description, so seniority rules. (I happen to think schools would be better off if it was performance based, but that's another can of worms.)

In an office job, layoffs are based more on what roles can be eliminated. You can assume that the most senior employees would have grown into the most important roles, but it's not always the case. I don't think there's too much reason to assume you're first on the chopping block unless your job is redundant.

Rob said...

It seems like just about every non-profit I know is perpetually on the brink of bankruptcy, but things always seem to work out in the end.

Also, although I have nothing to do with non-profit budgets* $100K does not seem like the type of thing to go job-hunting over, unless, as you mentioned, it's the beginning of things to come. When you take into account payroll taxes, benefits, etc. laying off "only" two people would probably overcompensate for the shortfall, but even that should be unnecessary with the right kinds of cuts and revenue increases.

*I once spent a summer as a Congressional intern. Boy did that mess with my understanding of numbers! I remember reading about businesses that lost tens of millions of dollars in one quarter and thinking to myself, "so basically, no change." The whole " a billion here, a billion there, and pretty soon you're talking about real money" mentality really does apply!

Anonymous said...

I work for a non-profit. We had a furlough last fiscal year. This fiscal year we seem to be doing alright. Management even brought back a few little perks.
They did layoffs but the grapevine said they used them as an excuse to remove non-performing/superfluous people some managers had been too lazy to fire anyway.

Hopefully your job is okay.
Since you seem to be doing well, I wouldn't worry.

Julie O'Malley, CPRW said...

If only all employees and all job seekers were as thoughtful and proactive as this one!

I don't have more advice to add -- just wanted to comment that much of the OP's first paragraph would sound great in a cover letter (if it comes to that). It's got a great tone of enthusiasm and confidence, and demonstrates the contributions and value this person has brought in a short time.