The Great Regression – a term coined at the height of the coronavirus epidemic since employees quit their jobs – is still in full swing. But as a sign of impending recession, you may want to think twice before jumping on the ship.
In the United States alone, four million workers lost their jobs in April, leaving more than a record 4.5 million who resigned in March. And more plans to join the Hordes in the coming months, as they look for higher salaries, more flexible arrangements and new challenges.
According to a recent Deloitte survey, two out of five genres and a quarter of millennials (24%) say they will leave their current role by next year.
However, the market for job seekers is changing rapidly. As inflation rises, central banks are moving faster to raise interest rates and cool the economy. As a result, the likelihood of economic contraction has increased, including a wide-ranging response for workers.
“In almost all cases, employees should be a little hesitant to resign. It’s a big decision, and it’s often not easy to consider all the pros and cons. A potential economic downturn makes that calculation even more difficult,” said Anthony Klotz, a professor at Texas A&M University. Who coined the term “The Great Regeneration,” CNBC’s Make It.
Last in, first out
Economists have been warning for months about the possibility of a recession after 2022 – a call echoed earlier this month by the UK’s National Institute for Economic and Social Research.
And while we’re not yet, career experts say job seekers should be wary of moving to a role in such an environment because it could expose them to potential layoffs.
“There will be some employers who will follow the ‘last in, first out’ rule – which means that the last employees to be hired will be fired first – if retrenchment is necessary,” said Amanda Augustine, a career expert at TopResum.
Trimming and job layoffs are a common form of recession, as companies seek to reduce and mitigate their costs. It is estimated, for example, that 22 million jobs were lost worldwide during the 2008-9 global financial crisis.
In such a situation, employers may adopt a so-called last-in, first-out policy, favoring employees who have a longer tenure and an existing business understanding.
“I’m not predicting a drastic change in philosophy here because it expands employer loyalty, the time it takes to train talent before seeing full output and productivity.”
According to Julia Polak, chief economist at the employment site ZipRecruiter, temporary or contract workers may be particularly at risk from such termination policies in times of recession. Although senior, more expensive employees may also be at risk, he noted.
“During layoffs, contractors are at the highest risk,” Polak said, highlighting their general isolation from a business and the consequent lack of benefits such as separation and health coverage.
So as the work landscape changes, employees should carefully weigh the risks and rewards of taking a step back and whether they will be able to justify their value in a new role.
“Professionals with a hard-to-source skill set should suffer less in the ‘last in, first out’ approach, if it comes to the market,” Samples said.
Still planning to join the Big Exit?
However, for some, the benefits of a job transfer may outweigh the risks, or they may be unbearable to retain.
In such cases, experts suggest conducting your job search while still in existing employment and being tactful about the next role. For example, if you want to relocate industries, do your research on which sectors have historically been most affected by the recession and which have improved.
Hospitality, retail, real estate and travel and tourism, for example, tend to suffer during recessions because consumers reduce discretionary spending. Meanwhile, essential sectors such as healthcare, utilities, food staples and transportation are generally able to withstand the impact of the economy.
Equally, if you are negotiating with a potential employer, it may be understandable to place more emphasis on benefits than salary. This does not mean underestimating your contribution; Rather, it means diversifying your compensation among other benefits – such as pay off, flexible work and tuition reimbursement – so that you are not both the newest and highest paid employee.
“Instead of focusing on the highest possible salary, focus on discussing more benefits in your offer that will value you and improve your overall work-life balance,” said Augustine.
“That way, you’re still getting extra value without setting a price for the job, which should be a lot harder on your new employer.”
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