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. But as signs of a forthcoming recession mount, you may want to think twice before jumping ship.
Four million workers left their jobs in April in the US alone, just shy of the record 4.5 million who resigned in March. And still more plan to join the hoards over the coming months, as they seek out higher salaries, more flexible arrangements and new challenges.
Two-in-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.
Yet, the market into which jobsseekers are moving is changing rapidly. As inflation soars, central banks are moving quickly to hike interest rates and cool the economy. That, in turn, has increased the likelihood of an economic contraction, with wide-reaching repercussions for workers.
“In almost all cases, employees should be a bit hesitant to resign. It’s a big decision, and it is often not easy to weigh up all of 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 for months now 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 they’re yet, career experts say jobseekers should be cautious about moving roles in such an environment as it could leave them more exposed to potential 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.
Layoffs and job cuts are a typical course of action in a recession, as companies seek to downsize and reduce their costs. It is estimated, for instance, that 22 million jobs were lost globally during the 2008-9 global financial crisis.
In such circumstances, employers may resort to so-called last in, first out policies, favoring those workers with longer tenure and existing understanding of the business.
“I don’t foresee a drastic change in philosophy here for reasons that span employer loyalty, to the time it takes to onboard and train talent before seeing full output and productivity,” Adam Samples, president for staffing at employment firm Atrium, said.
Temporary or contract workers could be especially at risk from such termination policies in a downturn, according to Julia Pollak, chief economist at jobs site ZipRecruiter. Though senior, more expensive employees could be at risk, too, she noted.
“During layoffs, contractors tend to be most vulnerable,” Pollak said, highlighting their typical detail from a business and resultant lack of benefits like severance and health coverage.
Workers should therefore carefully weigh the risks and rewards of making a move as the jobs landscape shifts, and whether or not they will be able to justify their value in a new role.
“Professionals with hard-to-source skill sets should suffer less in the ‘last in, first out’ approach, should it come to that in the market,” said Samples.
Still planning to join the Big Quit?
Still, for some, the benefits of moving jobs will outweigh the risks, or staying put may simply be untenable.
In such cases, experts recommended conducting your job search while still in existing employment, and being strategic about the next role you take on. For instance, if you’re looking to move industries, do your research on which sectors historically have been hardest hit by recessions and which have thrived.
Hospitality, retail, real estate and travel and tourism, for example, tend to suffer during downturns as consumers cut back on discretionary spending. Meanwhile, essential sectors like health care, utilities, food staples and transportation are typically better able to withstand shocks to the economy.
Equally, if you’re negotiating with a prospective employer, it may make sense to put greater emphasis on benefits than pay. 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.
“Instead of aiming for the highest-possible salary, focus on negotiating more perks into your offer that will bring you value and improve your overall work-life balance,” said Augustine.
“This way, you’re still getting additional value without pricing yourself out of a job, should times fall hard on your new employer.”
Sign up now: Get smarter about your money and career with our weekly newsletter