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Business

Risks of joining the Great Resignation in a recession




The Great Resignation – a term coined at the height of the coronavirus pandemic when employees quit their jobs – is still in full swing. But as a sign of an impending recession, you may want to think twice before jumping.

Four million workers left their jobs in April in the United States alone, just away from the record 4.5 million who resigned in March. And even more are planning to join in the coming months, as they seek higher salaries, more flexible schemes and new challenges.

Two out of five Gen Zers and a quarter (24%) of millennials say they will leave their current role by next year, according to a recent Deloitte survey.

Nevertheless, the market that job seekers are moving into is rapidly changing. As inflation rises, central banks move rapidly 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 be a little hesitant to resign. It̵[ads1]7;s a big decision, and it’s often not easy to offset all the pros and cons. A potential economic downturn makes this calculation 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

For several months now, economists have been warning about the prospect of a recession later in 2022 – a call that was echoed earlier this month by the UK’s National Institute for Economic & Social Research.

And although we are not yet, career experts say that job seekers should be careful about moving roles in such an environment, as it may make them more vulnerable to potential redundancies.

“There will be some employers who will follow the ‘last in, first out’ rule – meaning that the last employees hired will be the first to be let go – should layoffs become necessary,” Amanda Augustine, career expert for TopResume , so.

Business women have discussion in conference rooms

Klaus Vedfelt | Digitalvision | Getty pictures

Layoffs and cuts are a typical procedure in a recession, as companies try to downsize and reduce their costs. For example, it is estimated that 22 million jobs were lost globally during the global financial crisis of 2008-9.

Under such circumstances, employers can resort to so-called last in, first out policies, which favor those workers with longer employment relationships and existing understanding of the business.

“I do not envisage a drastic change in the philosophy here for reasons that span employer loyalty, to the time it takes to board and train talents before seeing full production and productivity,” said Adam Samples, HR manager at Atrium.

Professionals with skills that are difficult to acquire should suffer less in the “last in, first out” approach, if it should come to that.

Adam tries

President of Staff, Atrium

Temporary or contract employees may be particularly vulnerable to such termination policies during a downturn, according to Julia Pollak, chief economist at the ZipRecruiter job site. Although senior, more expensive employees may be at risk, she noted.

“During layoffs, contractors tend to be most vulnerable,” Pollak said, highlighting their typical detachment from a business and the resulting lack of benefits such as severance pay and health coverage.

Employees should therefore carefully weigh the risks and benefits of moving as the job mix changes, and whether they will be able to justify their value in a new role.

“Professionals with skill sets that are difficult to acquire should suffer less in the ‘last in, first out’ approach, should it come to that in the market,” says Samples.

Are you still planning to join Big Quit?

Still, for some, the benefits of moving jobs will outweigh the risks, or it may simply be unsustainable to stay.

In such cases, experts recommend performing the job search while you are still in existing employment, and being strategic with the next role you take on. For example, if you want to relocate industries, you can examine which sectors have historically been hardest hit by recessions and which have flourished.

Klaus Vedfelt | Digitalvision | Getty pictures

Hospitality, retail, real estate and travel and tourism, for example, tend to suffer during recessions as consumers cut back on discretionary spending. Meanwhile, important sectors such as healthcare, tools, food and transport are usually better able to withstand shocks in the economy.

Similarly, if you are negotiating with a potential employer, it may make sense to place more emphasis on benefits than pay. This does not mean underestimating your contribution; rather, it means diversifying your compensation across other benefits – such as paid time off, flexible work and reimbursement of tuition – so that you are not both the newest and highest paid employee.

“Instead of aiming for the highest possible salary, focus on negotiating more benefits into your offer that will give you value and improve the overall work-life balance,” said Augustine.

“This way, you still get added value without praising yourself out of a job, if times fall hard on your new employer.”

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