5 reasons how a recession can affect your job
- Australia is in recession
- Jobs will be lost in a recession
- You will need survival skills to keep your job
- Staying engaged and productive is important
- Upskilling can help you avoid being laid off
- If you do get laid off, new skills can help you find another job
Australia is officially in recession but the worse is yet to come. A recession occurs when there are two or more consecutive quarters of negative economic growth. Economic growth is measured by GDP (gross domestic product) or other macroeconomic factors like unemployment. GDP figures for the March Quarter show our economy has shrunk by 0.3 percent because of the bushfires and the pandemic. May’s unemployment figures show a staggering 800,000 Aussies have lost their jobs. Australia is facing its worse ever recession in 29 years.
In a recession, companies facing elevated costs, stagnant revenue growths and increased debt pressure tend to lay off staff to cut costs. You may have a job today. But there’s no guarantee you will still have this job tomorrow.
Here are five reasons how a recession can affect you:
1. You could be laid offDuring a recession, a rash of business will fail. The most affected ones are usually small businesses or sole traders. Many of these companies do not have the financial or reputational stability to survive the negative impacts of a recession. This time round, large stable corporations like airlines, retail giants and hotel chains have also been adversely affected.
In a normal market, when a business fails, the assets are sold off and employees may be re-hired by the new investors. In a recession, many businesses across a wide spectrum of industries and markets will start failing at the same time. There is no bail-out. If this happens to your company, you could be facing unemployment.
Even if the business does not close, your boss may decide to cut costs by hiring cheaper staff. In a recession, the supply of labour goes up because more people have been laid off. Desperate job seekers with skills will trade lower wages for a job. This is not good news for you – particularly if you have standard skills on a high wage.
2. You could be restructured out of a job
In a recession, external forces beyond the organisation’s control can force companies to restructure, re-align and reorganise to remain competitive. Even if you survive the first round of staff layoffs, your immediate line of command many not and that can still spell disaster for you because the restructuring of the division could see you losing your job too.
You are more likely to survive a restructuring if you have a broad range of skills that can be applied to a new role.
3. You could find it harder to be re-employed
In a normal market, an increase in supply and decrease in demand will result in a lower price (i.e. average wage) but not necessarily a lower total number of jobs once the price has adjusted. In a recession, unemployed workers will find it harder to secure a new job and could potentially remain in a cyclical unemployment state.
With shrinking job opportunities in a recession, if you were laid off tomorrow, can you confidently say you would easily walk into another role? If the answer is no, it’s time to take some action.
4. You may be taking on additional responsibilities
Let’s say you survive the layoff. In a recession, employers tend to freeze hiring. If you were one of the lucky few to survive, you could end up with additional tasks. Do you have the skills to carry out these tasks? What if these tasks were supervisory and require a set of soft skills that you do not possess? A recession is not a time to gamble on your future.
5. You have to deal with employment stressEmployment stress levels in Australia have doubled since the pandemic. Employment stress is defined as a ‘significant change in work status, joblessness and reduced working hours.’ Australia has seen a staggering 130 per cent increase in employment stress as a result of COVID-19. The most affected city – Melbourne – where employment stress has risen to nearly 400 per cent in some suburbs. Employment stress impacts your mental, physical and emotional wellbeing. It also affects that of your spouses and children. Training can help you put things in perspective so you can better deal with the issues you are facing.
How to recession-proof your career
Layoff decisions may not be in your control but there are some things you can do to protect your job in a recession. Here are some of our recommendations:
Be a survivor
If you want to survive a layoff, be a survivor. Work hard, stay cheerful and be agreeable. Stay engaged with your work and be extremely productive in your outcomes. People prefer to work with a personable colleague. Managers prefer a worker who is effective and efficient. Now is not the time to make enemies, show laziness or be difficult.
Of course, putting on a brave face in times of strife is psychologically challenging. But survivors have to be forward-thinking. Studies about concentration camp survivors showed that many of them survive the atrocities by imagining a better future for themselves. As Freud once wrote in ‘Mourning and Melancholia’, the difference between mourning and acute depression is that mourners can successfully anticipate a life beyond the grieving. Depression sufferers only see a spiral of despair.
Upgrade your skills
The ability to be ambidextrous can help you keep your job in a recession. If your boss knows you are capable of more than one skill at a time, he or she is less inclined to put your name in the redundancy list. If you are restructured out of your current position, new skills can also mean you could be absorbed into another division.
If you want to impress the boss with your multitasking abilities, you must first upgrade your existing skills set. In a crisis, employers are looking for staff who can demonstrate superior leadership skills including creative problem solving, time management, team building, communication and adaptability and flexibility. If you can show you possess these skills, you are more likely to be retained in a shrinking workforce.
If the inevitable happens and you’re laid off, the new skills you have acquired can go a long way in helping you secure another job.
Show support to your boss
Class consciousness and false consciousness were mooted by Karl Marx in his book, ‘Manifesto of the Communist Party’. Class consciousness is the awareness of a social or economic class of their status and interests in the social order. False consciousness, on the other hand, is the failure to see oneself as part of a class with particular interests that are relative to the economic and social system.
Scientists and politicians have said that the world can defeat the virus if everyone bands together and do the right things. We cannot flatten the curve if we do not social distance, self-isolate or practise good personal hygiene. We did it then we can do it again. The same applies at the workplace.
Banding together in solidarity over a common cause is about survival. In times of recession, our managers are humans too. They need our support as much as we need theirs. Many of them are experiencing the same challenges of WFH, family safety and children’s education that we are experiencing.
In times of crisis, the better your relationship is with your boss, the less likely he or she will want to cut you off. Empathy and maturity even at your level is a strong motivator that can unite and inspire other colleagues to work harder.
Stay focused on a common organisational goal
One of the best ways to show the boss you are a valued employee is to stay close to the organisational goals during the crisis. Having a common goal keeps the team focused on their roles. Your boss will be able to tell you what these goals are. If you work hard to achieve these goals, you will not only feel a sense of achievement when goals are met. You may have done enough to convince your bosses to keep you on.
Embrace not resist change
A crisis is not the time to be a rebel with or without a cause. Change is imminent in a recession. The sooner you can accept and embrace it, the more secure your job will be.
If you feel the new changes are against your authenticity and wants out, try and negotiate a suitable exit package with the company. Ideally, you should be in a comfortable financial position to make this call because the reality is that you may not be able to walk into another role anytime soon.
In a recession, many forces are working against you. You have no control over them. Instead of directing your anger at them, try to channel your energies into a strategy to help you weather the storm. You have to be extremely competent to survive a recession but the right attitude and a willingness to support the boss to get the job done can have a big impact on whether you get to keep your job or not.