Hitting Rock Bottom After a Job Loss Could Be Good News, Study Says

By: Marie Donlon

Hitting rock bottom — in terms of losing a job — can actually be beneficial, possibly resulting in radical solutions that may lead to an entirely new work identity. So says research from the University of Notre Dame.

Researchers published their findings in an article titled "Hitting Rock Bottom After Job Loss: Bouncing Back to Create a New Positive Work Identity," which appears in the January 2018 edition of the Academy of Management Review.

"On the way down, we frantically do all sorts of things to try and repair the situation, and suffer as they fail," said lead author Dean Shepherd, the Siegfried Professor of Entrepreneurship in Notre Dame's Mendoza College of Business . "Bottoming out frees us from the misconception that the problems can be fixed, and in the process, frees us from other constraints and negative emotions and provides the conditions necessary to find a viable solution."

The two likely outcomes of hitting rock bottom, according to researchers, are either recovery or dysfunction. As such, researchers recommend “identity play” (i.e., imagining different work identities) as a means of recovery.

 "Using ‘identity play’ provides a safe environment to escape the situation and try new things, discarding bad ideas or finding and refining a new identity and returning stronger than before."

This type of play, according to researchers, gives that person the chance to simultaneously withdraw from the mental anguish caused by the job loss and the chance to create alternative new work identities. This chance to creatively explore and subsequently discover a new career path would not have been likely without first hitting rock bottom.

"A failed corporate executive might consider a variety of other potential roles," Shepherd says, "For example, sitting on the board of a nonprofit organization that is desperate for experienced managerial guidance, exploring government positions or running for office, working with startups, and so forth. Similarly, a failed entrepreneur might explore how skills learned in starting a business could be applied in a corporate setting, take standardized exams to be considered for law school or engage in other low risk exploration activities. In these cases, hitting rock bottom opens up myriad new opportunities."

To read more, go to the Academy of Management Review.