Recently, the US stock market dipped into bear market territory before rebounding. More companies have announced layoffs and hiring freezes (including major tech firms), which can certainly worry job seekers. Other employers have drawn a clear line against remote work. What to do in this situation?
To help answer this question, we spoke with Sara Causey, a Staffing & Recruiting SME and the owner of Causey Consulting LLC, to get an expert opinion.
You’re inside the job market every day. Tell us what you’re seeing.
The ripple effects were already becoming evident back in May. Prominent companies like Netflix, Robinhood, and Carvana had layoffs and Meta announced a hiring freeze. Not long after that, my LinkedIn feed became a sea of people announcing they had been part of a layoff or they had an offer rescinded before even starting a new job. It seemed that the job market quickly turned into the wild, wild west. On my blog and podcast, I had been voicing my own concerns that we were headed into a recession or some type of significant market contraction. I was hoping I would be wrong on that prediction, to be honest.
How does a recession or a bear market impact the job market from your perspective?
Great question – and it’s one that needs to be addressed. All of these concepts are intertwined. A recession tells us that there’s an overall decline in activity inside the economy and this includes labor. To put it simply: if people are feeling financially pinched and they start to cut back, they’re usually buying fewer goods and services. That in turn leads companies to not need as many employees, which leads to layoffs and/or hiring freezes. Unemployment then goes up. The really scary thing there is that unemployment historically tends to go up quickly but is slow to abate.
The Great Resignation has gotten so much press over the past couple of years. What do you see happening with the Big Quit?
I lived through The Great Recession of 2008-2010 and it was a tough time. From my experience, whatever you had to do to hang on to your job, you did. I understand some people will bristle at that notion, but I’m being as honest as I can be. I think at one point during The Great Recession, the unemployment rate hit 10% and it was very troubling, very worrying. The further we go into recession territory, the more likely it is that The Great Resignation will end. And it may end immediately if we rapidly careen into a recession. It boils down to basic supply and demand: if there are more people who need or want a job and fewer jobs available to them, competition for those jobs will become more intense. Elon Musk is apparently not even waiting for a recession or a deep market contraction to occur. He’s already announced that he wants an end to remote work at Tesla and if you disagree, there’s the door. I believe we will see more companies pushing for RTO in the coming months.
Given what you’ve just said, what do you think job seekers need to consider? What do companies need to consider?
It’s crucial to think about things in the long term. Instead of training for a sprint, train for a marathon. During the bull market and The Great Resignation, job seekers could job hop without much difficulty. They could also ask for high salaries, remote-only work, and perks and hold the line on getting those things. We’ve already witnessed companies having layoffs and hiring freezes and if that trend continues in more industries across the country, we’ll likely see an uptick in the unemployment rate. I think the onus is on job seekers to use caveat emptor. Do good research and due diligence. Ask yourself if you really need to job hop right now. Are you in a stable job with good pay? Do you feel like the risk of leaping one more time and then potentially getting a pink slip is worth it? For companies, it’s important to treat job seekers with dignity and respect. I believe one reason why The Great Resignation happened is because employees and candidates felt disrespected by foolish, protracted, and sometimes inhumane hiring processes. There is absolutely no justifiable reason to bring any of that nonsense back! If you have been able to streamline your hiring funnel and eliminate unnecessary steps, don’t resurrect bad behavior and use an economic downturn to rationalize it. At the risk of sounding way too optimistic, my hope is that there will be dignity and respect offered on both sides of the equation, for candidates and hiring managers alike.
For more HR insights, you can visit Sara at causeyconsultingllc.com.