Causes And Reasons For Unemployment

There are two basic reasons for unemployment: external factors and internal factors. Although unemployment rates can vary from month to month, the general trends of unemployment are put under close inspection because they can be a good indicator of how the country is doing financially. By understanding why unemployment occurs, you can be better prepared for the possibility of being laid off.

External Factors For Unemployment
The external factors for unemployment have to do with issues that are beyond a worker's control. These factors can include national financial problems, financial problems within the company or company reorganization. In some cases, the financial health of the nation can affect the way a company is making money. For example, a company that has a government contract will often have to lay off people if the country is struggling financially. Sometimes, even if there is no government contract, a company will lay people off if they suspect their industry is going to be threatened by the bad economy.

Another external reason for layoffs is financial problems within the company. If a company is struggling, it may cut down on the positions to try to save the company. A company may also let people go because they are restructuring the company for one reason or another. They may eliminate a department because they are developing a new strategy for the marketplace, or they have found a cheaper way to do the work, such as outsourcing.

Internal Factors For Unemployment
In addition to external factors for unemployment, there are also internal factors. These factors are normally the result of something that is happening to the individual employee or something that they can control. One of the main reasons for layoffs is poor job performance. If an individual is consistently missing deadlines, has a poor attitude or has problems with getting to work on time, they may be let go to make way for more productive members of the team. While working harder and smarter can't help if your company just lost a major contract or is shrinking due to larger economic factors, you can avoid being laid off in many cases simply by doing your best and being a team player.

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