Monday, 8 September 2008

Happy Unemployment!

It is coming up to 18 months that the markets have turned first on credit professionals and then on everyone. But friends who are casualties of the market do not seem very depressed about their lack of employment. What's wrong with this picture?

It is inevitable that, when banks start laying off 10-15% of their workforce, it will hit people you know. In my case, very recently, a few close friends have become victims of the market downturn and lost their jobs. Some of them even accepted voluntary redundancy that was offered, so conceivably they could have clung to their job and still be happily employed.

However, they are unemployed and as it turns out after doing some catching up (and being prepared for some hand-holding and back-padding) I found out to my surprise that neither of them is particularly unhappy.

On a side note, when I grew up in the Eighties, there was a huge rise of unemployment in the country I was living at the time, and it was generally perceived to be a big catastrophe to lose one's job. Chances of getting back into work were slim, and everybody feared the financial and social consequences of being out of work.

I turned out to be unemployed as well, albeit for 4 weeks only back then, which was before starting university. But even then our neighbours always asked my parents in a very concerned fashion about my future when all I could think of was to blow the little money I got from the state on a trip to Lanzarote with a friend.

So what has changed since then such that my friends do not seem to be concerned about turning into long-term residents of the local job centre? Is all the doom and gloom that is written about everyday maybe not that gloomy in reality after all?

After meeting a few on them individually, a few reasons for the total absence of depression transpired:

  • In general their redundancy packages were appropriate, and while nowhere near enough to retire, usually sufficient to get them through some time and to enable them to sit out the current bull market.
  • A few of them perceived their job loss as an opportunity to do something they always wanted to do, but had never had the courage to quit their jobs for. And the goals they dreamt of pursuing ranged from setting up their own trading operation to finishing another university degree.
  • Still being optimistic that markets will come back eventually (probably having been through the dot-com crash 7 years ago has already taught them a lesson about how cyclical the markets are), the opportunity to spend more time with the families is seen as something of a god-sent.
  • And finally, with one of them, I couldn't even catch up in person since she has chosen to travel the world for a little while and happened to be in Thailand last time I tried. As found out before, even a modest London severance package goes a few extra miles in other places of the world.

While I am grinding my teeth at work, only see my son for limited time during the week since I usually come home after his bed-time and have to make do with 5 weeks of holiday a year, I seriously wonder whether I could be caught on the wrong side of the equation.

The atmosphere in the market is so downbeat, with bonus expectations getting in a downward spiral as well, that maybe those who are out of the market currently are not missing out on a lot?

But probably a colleague who turned down redundancy to be moved into a different role has it right when she thinks that at least, when you are still in the market right now, you have a better chance of being in the game when (or if) markets pick up again.

Let's just hope that banks do not re-iterate previous mistakes when that happens, in that they don't bring in expensive people from outside but rather look after the staff that has managed them through the rough times.

Originally on Here is the City Life on 3rd August 2008. The original can be found here.