Are we headed for another recession? Though America has largely rebounded from the COVID recession of 2020, global events and domestic inflation have raised the possibility of trouble ahead. What does that mean for employers and recruiters?
The “Perfect Storm” of a Coming Recession
First, it’s important to start with facts. Is a recession truly imminent, or is this merely the hand-wringing of doom-saying economists?
Earlier this year, we witnessed shocking drops in the U.S. stock market, with the Dow dropping nearly 500 points in a single day. Meanwhile, the U.S. economy has been snarled by inflation, rising interest rates, and continued disruption in the global supply chain.
There are also signs that the housing market — a major indicator of the wider economy — is beginning to slow. Mark Zandi, chief economist for Moody’s Analytics, said that after a period of skyrocketing demand and high prices, home values are headed for a correction.
“The housing market has peaked … everything points to a rolling over of the housing market,” Zandi told Fortune.
What’s more, COVID doesn’t appear to be over yet. If America experiences another resurgence of the virus, we could find ourselves facing a “perfect storm” that ushers in another period of economic recession, one that may last longer than the one brought on by the 2020 pandemic.
The Great Resignation and the Coming Recession
Much has already been written about the so-called “Great Resignation,” where millions of American workers quit their jobs in search of greener pastures. But as the Harvard Business Review points out, the average monthly quit rate has been rising steadily since 2009.
Regardless of the cause, one thing remains clear: American workers are leaving their jobs at unprecedented rates. As tempting as it may be to seek out new employment, economists caution that our unstable economy may soon make quitting a bad idea.
Last in, First Out?
Should a recession occur, many companies may follow conventional wisdom and issue widespread layoffs. Temporary workers and contract employees tend to be the most vulnerable to these kinds of shifts, but even regular employees aren’t immune.
During “lean” periods, companies often jettison their newest employees. “Last in, first out” has become something of a business mantra, meaning the most recent employee hired is the first one to be shown the door.
With a recession potentially on the horizon, this might make hiring managers reluctant to bring on new staff members, especially if they’ll soon be on the chopping block should cutbacks be necessary.
But now can actually be the best time for candidates to join your team. Why? Onboarding before the recession occurs can actually make your company more resilient.
Additionally, leaving these roles unfilled will only put additional strain on your other team members. When the recession inevitably lifts, they may feel so burnt out that they can’t wait to find another job opportunity. Don’t let the recession drive you to staff cuts as your first option.
Evolving Compensation Strategies
Still, the recent “Great Resignation” has a lot of companies scratching their heads about how to retain their senior employees. In many cases, employees and candidates have driven up salary caps, which puts pressure on companies to find new ways to retain a competitive advantage in the world of human resources.
The best companies are putting together an evolving set of employee benefits that go considerably beyond the usual health plan and paid vacation.
Many employees are attracted to companies that offer diverse benefits such as wellness programs, childcare options, and the flexibility to work from home on at least a limited basis. And with burnout such a critical issue, many companies are adding mental health benefits and programs to help their employees cope with stress.
Putting Purpose over Profits
Perhaps most importantly, many younger workers are looking not just to collect a paycheck but to change the world. Millennials and Gen Z want a career that gives them a broader sense of purpose and a chance to make an impact on their community and beyond.
Providing an ecosystem where workers contribute to the greater good might be a surefire insurance policy in the event of a recession. It’s easy for other companies to assemble an attractive job offer, so what can your company provide that no one else can? Ideally, it’s a sense of purpose and value, something that gives your workforce momentum even when the world slows down.
Making the Right Connections
Ultimately, employment is all about relationships. AccruePartners can help you make the right connections regardless of the larger economy. Visit our job listings page to search for new opportunities, or connect with our talent acquisition firm to find jobs that match your skillset.