The Great Retirement — a term coined at the height of the coronavirus pandemic when employees quit their jobs in their swaths — is still in full swing. But as a sign of an imminent recession, you might want to think twice before disembarking.
In the US alone, four million workers left their jobs in April, just below the record 4.5 million who quit in March. And even more are planning to join the hordes in the coming months as they seek higher salaries, more flexible arrangements and new challenges.
According to a recent Deloitte survey, two in five Gen Zers and a quarter (24%) of Millennials say they will leave their current role by next year.
But the market into which job seekers are moving is changing rapidly. As inflation soars, central banks move quickly to raise interest rates and cool the economy. This, in turn, has increased the likelihood of an economic contraction with far-reaching consequences for workers.
“In almost all cases, employees should hesitate a little before giving notice. It’s a big decision, and it’s often not easy to weigh all the pros and cons. A potential economic downturn makes that calculus even more difficult,” Anthony Klotz, a professor at Texas A&M University who coined the phrase “The Great Resignation,” told CNBC Make It.
Last in, first out
Economists have been warning of the prospect of a recession later in 2022 for months – a call echoed earlier this month by Britain’s National Institute for Economic & Social Research.
And while we’re not there yet, career experts say job seekers should be cautious about changing jobs in such an environment, as it could put them more at risk of potential layoffs.
“There will be some employers who will follow a ‘last in, first out’ rule – which means that if layoffs should become necessary, the last hired will be the first to be fired,” Amanda Augustine, careers expert for TopResume , called.
Businesswomen discussing in conference room
Klaus Vedfelt | digital vision | Getty Images
Layoffs and downsizing are common tactics in a recession as companies seek to downsize and cut costs. For example, it is estimated that 22 million jobs were lost worldwide during the 2008-2009 global financial crisis.
In such circumstances, employers can resort to so-called last-in, first-out policies and favor employees with more seniority and an understanding of the business.
“I don’t see a drastic change in philosophy here for reasons ranging from employer loyalty to the time it takes for talent to be onboarded and trained before full performance and productivity are achieved,” said Adam Samples, president for Staff at the employment agency Atrium.
Professionals with hard-to-get skills should suffer less from the “last in, first out” approach should it arise.
Adam Samples
President of Human Resources, Atrium
According to Julia Pollak, chief economist at job board ZipRecruiter, temporary or contract workers could be particularly vulnerable to such termination policies in a downturn. Although older, more expensive employees could also be at risk, she noted.
“During layoffs, contractors are typically the most vulnerable,” Pollak said, highlighting their typical detachment from a company and resulting lack of benefits like severance pay and health insurance.
Employees should therefore carefully consider the risks and rewards of moving as the job landscape changes and whether or not they will be able to justify their value in a new role.
“Professionals with hard-to-get skills should suffer less from the ‘last in, first out’ approach should the market arise,” said Samples.
Still planning on joining the Big Quit?
Still, for some, the benefits of changing jobs outweigh the risks, or staying there is simply unsustainable.
In such cases, experts recommended doing the job search while still on the job and being strategic about the next role you take on. For example, if you want to move industries, research which sectors have historically been hit the hardest by recessions and which have been successful.
Klaus Vedfelt | digital vision | Getty Images
Hospitality, retail, real estate, and travel & tourism, for example, tend to suffer downturns as consumers rein in discretionary spending. Meanwhile, key sectors like healthcare, utilities, staple foods and transportation are typically better able to withstand economic shocks.
It can also make sense to prioritize benefits over pay when negotiating with a potential employer. That doesn’t mean underestimating your contribution; Rather, it means that you spread your pay across other perks — like paid time off, flexible work hours, and tuition reimbursements — so you’re not both the newest and the highest-paid employee.
“Rather than aim for the highest salary possible, focus on adding more perks to your offer that add value and improve your overall work-life balance,” Augustine said.
“That way, if times get tough for your new employer, you still get value without price yourself out of a job.”
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