Risks of joining Great Resignation in a recession
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The Great Resignation — a term coined at the height of the coronavirus pandemic as employees quit their jobs in their swathes — is still in full swing. You might think twice about jumping ship, however, as the signs of recession are mounting.
Four millionWorkers quit in April alone in the U.S., just shy to the record. 4.5 millionFebruary saw the resignation of a number of employees. Many others plan to join hoards as they search for higher salaries, better flexible arrangements and new challenges in the future.
According to A.I.M., two-in-five Gen Zers (24%) and one-quarter (24%) of millennials predict that they will be leaving their job by the end of next year. recent Deloitte survey.
But, this market is rapidly changing for job seekers. You can see the changes in this market. inflation soarsCentral banks have been quick to raise interest rates and cool down the economy. This has led to an increase in the probability of economic contraction with severe consequences for workers.
In almost all instances, employees need to be cautious about stepping down. It is an important decision that can often be hard to make. 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.
First in, last out
For months, economists have warned of the possibility of an economic collapse. recession later in 2022 — a call echoed earlier this month by the U.K.’s National Institute for Economic & Social Research.
Although we don’t know if they are yet, career professionals warn that jobseekers need to be more cautious when moving into such an environment. They could become more vulnerable to layoffs.
“There will be some employers who will follow the rule of ‘last in, first out’ — meaning that the last employees to be hired will be the first to be let go — should layoffs become necessary,” Amanda Augustine, career expert for TopResume, said.
In a recession, layoffs and job reductions are common as businesses seek to reduce costs and downsize. According to estimates, the average layoff is around 10%. 22 million jobs were lostGlobal financial crisis of 2008-9.
Employers may use so-called “last in, first out” policies to favor workers who have a longer tenure and a better understanding of the company.
Adam Samples from Atrium, the president of staffing, stated, “I don’t expect a radical change in philosophy there for reasons that span employer loyalty to the time required to onboard talent before we see full output.”
If it comes to this, professionals with difficult-to-source skills should be less affected by the “last in and first out” strategy.
Adam Samples
Atrium President for Staffing
According to Julia Pollak (chief economist at ZipRecruiter), temporary or contract workers may be particularly at risk of such policies. Not only could senior and more costly employees be at-risk, but so can junior workers.
Pollak noted that contractors “are most vulnerable” during layoffs. He emphasized their usual detachment and lack of benefits such as severance pay and health coverage.
As the job landscape changes, workers should weigh all the potential risks and benefits of moving. Also consider whether they can justify the cost to their new position.
Samples said that “Professionals who have hard-to source skills sets should not be subject to the ‘last-in, first-out’ method, should that happen on the market.”
Do you want to take part in the Big Quit
However, some may find the advantages of changing jobs more rewarding than their risks. For others, it might be impossible to stay put.
In these cases experts recommend you keep your current job and do your job hunt while looking for a new position. You might also want to research which industries have historically been successful if you plan on moving into other sectors. hardest hit by recessionsThese have prospered.
As consumers reduce discretionary spending, downturns can have a negative impact on the hospitality, retail, and real estate sectors as well as travel and tourism. While essential industries like transportation and utilities are more resilient to shocks, those in the health, utility, food staples, and other sectors of the economy, such disruptions can be devastating.
If you are negotiating with prospective employers, it might make sense for them to emphasize benefits more than salary. That doesn’t mean undervaluing your contribution; rather it means diversifying your compensation across other perks — like paid time off, flexible working and tuition reimbursement — so you’re not both the newest and highest paid employee.
Augustine said, “Instead of striving for the highest possible salary, you should focus on getting more perks in your offer that will add value to your life and enhance your work-life balance.”
You get more value, but you don’t have to give up your job if things are difficult for you.
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