The big quit — a term coined at the height of the coronavirus pandemic as employees quit their jobs in their strips — is still in full swing. But as signs of a coming recession, you might want to think twice before jumping ship.
Four million workers left their jobs in April in the United States alone, slightly less than the record 4.5 million who quit in March. And even more plan 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 job by next year.
However, the market to which job seekers are heading is changing rapidly. As inflation soars, central banks act quickly to raise interest rates and cool the economy. This, in turn, increased the likelihood of an economic contraction, with far-reaching repercussions for workers.
“In almost all cases, employees should be a little hesitant to quit. It’s a big decision, and it’s often not easy to weigh the pros and cons. A potential economic downturn makes that 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 months economists have been warning of the prospect of a recession later in 2022 – a call echoed earlier this month by the UK’s National Institute for Economic & Social Research.
And while we’re not yet, career experts say job seekers should be careful when changing jobs in such an environment, as it could put them at greater risk of possible layoffs.
“Some employers will follow the ‘last in, first out’ rule — meaning the last employees to be hired will be the first to be fired — should layoffs become necessary,” Amanda Augustine, career expert for TopResume, mentioned.
Layoffs and job cuts are a typical course of action during a recession, as companies seek to cut staff and cut costs. It is estimated, for example, that 22 million jobs were lost worldwide during the global financial crisis of 2008-2009.
In such circumstances, employers may resort to so-called last-in, first-out policies, favoring workers with longer seniority and an existing understanding of the business.
“I don’t foresee a drastic change in philosophy here for reasons that range from employer loyalty to the time it takes to onboard and nurture talent before you see full performance and productivity,” said Adam Samples, president the staffing of the investment company Atrium.
Temporary or contract workers could be particularly exposed to such layoff policies in a downturn, according to Julia Pollak, chief economist at job site ZipRecruiter. Although older and more expensive employees may also be at risk, she noted.
“During layoffs, contractors tend to be the most vulnerable,” Pollak said, pointing to their typical detachment from a company and the resulting lack of benefits like severance and health coverage.
Workers must therefore carefully weigh the risks and benefits of change as the employment landscape changes, and whether or not they will be able to justify their value in a new role.
“Professionals with hard-to-find skills should suffer less from the ‘last in, first out’ approach if it were to come to market,” Samples said.
Still considering joining the Big Quit?
Yet for some, the benefits of changing jobs will outweigh the risks, or staying put may simply be untenable.
In such cases, experts have recommended conducting your job search while remaining in the existing job and being strategic about the next role you take on. For example, if you’re looking to shift industries, do your research on which sectors have historically been hardest hit by recessions and which ones have prospered.
Hospitality, retail, real estate, and travel and tourism, for example, tend to suffer during downturns as consumers reduce discretionary spending. Meanwhile, essential sectors like healthcare, utilities, basic foodstuffs and transport are generally better able to withstand economic shocks.
Likewise, if you’re negotiating with a potential employer, it may be a good idea to put more emphasis on benefits than salary. This does not mean undervaluing your contribution; rather, it means diversifying your compensation across other benefits — like paid time off, flexwork, and tuition reimbursement — so you’re not both the newest and highest-paid employee.
“Instead of aiming for the highest possible salary, focus on negotiating additional benefits in your offer that will bring you value and improve your work-life balance,” Augustine said.
“That way you still get extra value without missing out on a job, in case times are tough for your new employer.”
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