How to Prepare for A Possible Recession

Despite the GDP contracting two quarters in a row, which usually means we’re in a recession, unemployment is at 3.6% and consistent job growth means the economy is continuing to improve. Inflation is hitting everyone in the pocket, leading the Federal Reserve to raise interest rates, yet housing prices are expected to continue rising, just more slowly. Bloomberg this week said a long, deep recession still could be looming. After 2020, we are all very much on our toes, hyperaware that anything can happen. I am not ringing alarm bells, and make no claims to know what is around the corner, but I know that most people feel better and fair better when they are prepared for what may come.?

If there is a recession, it will be my 3rd in the world of employment, and I’ve noticed a few things about what jobs and professionals tend to thrive in spite of, and sometimes because of, economic downturns. Some will feel it right off the bat, and some will think they are safe at first, then find that they were just there to make cuts and then be cut loose.?

If the company offers perks such as recruitment, retention, engagement, or wellness tools, they will be the first to go. Unfortunately, benefits will be the next thing evaluated, followed by compensation. Prepare yourself to live without them. Schedule a meeting with your financial advisor to see what resources they recommend and the steps they advise. Don’t do anything rash.?

Once costs are cut, people come next.?

Where companies usually cut people first:

• Salaries way above market value?
• Research & Development
• Marketing?
• Customer Service?
• Administrative support?
• Accounting support
• Future-based, high-priced IT projects

The first thing you want to do is take stock. Assess your value to your company and document everything you have done to protect or boost the bottom line.?

Of course, as a branding expert and résumé/LinkedIn profile writer, I will tell you to prepare and plan for an exit that will still position you for career growth. I have coached through the Great Recession, and my clients still landed great jobs that improved their career trajectory, but it didn’t happen by chance, accident, or luck; it was by design. Even while jobs are eliminated, new opportunities to help companies navigate through these times arise, so consider engaging a job market expert and career coach like me to help you strategize, plan, and best position yourself for opportunity.?

The next thing I recommend you do is to network more. Start reaching out to old colleagues. Find out what’s going on in other companies. Form alliances. Attend mixers and professional organization events. Meet new people. Spend time in LinkedIn groups engaging in conversation and inviting new people to connect and chat offline. Carve out a little more time to help others. Do some volunteering. Be the person people think of first when opportunities arise.?

Next, consider the following:

Did you take a job that offered you a huge boost above market value? Did you increase your standard of living to match it??

If you love the job you accepted and really want to keep it, the best way to avoid being first on the chopping block is to eliminate excess lifestyle-related expenses and volunteer for a pay cut. This may sound extreme, but this gesture will prove that you are a team player, you are savvy enough to be proactive, and you are a leader willing to lead by example, especially if anyone on your team is on the verge of leaving, either by choice or by force. You may even be able to negotiate a post-recession recovery of your income.?

Is your job revenue-generating or a “cost center”??

Cost centers of companies include accounting, maintenance (including tech maintenance), human resources, administration, accounting, research & development, and often marketing, though successful marketing professionals can effectively argue that they have contributed directly to profit and the time to prepare to prove that is now, and customer service, which also can demonstrate value with customer retention and generate revenue through up-selling. After all, it costs a company less to keep customers than to onboard new ones.?

When the cost centers are thinned out, admin and support resources will be stretched and overburdened. Those remaining will have to put in extra hours to get done what is beyond the bandwidth. If you are a parent, gather your personal support tribe now to make sure that you have backup rides for your kids.?

Traditionally, the sales department is depended upon to keep companies profitable, and yet in a recession, the sales cycle can get longer. If you are a highly-paid salesperson, you better make sure you can demonstrate your worth. You may want to utilize any support staff you have now to boost your pipeline, as you will likely need a higher volume of leads to close the same amount of sales while both companies and consumers spend less and your support staff will likely shrink, leaving more of the administrative burden on you with less time to build that necessary pipeline.?

There will be competition for time off. If taking time off means someone else has to fill in for you, put in for it now and make those arrangements, as the people you think will be there to fill in may not be. If you have any elective surgeries you need to schedule, get them in.?

If you are adding to the budget without adding ROI, make cuts now. Prove you can do more with less.?

If your project(s) is in trouble – behind, over-budgeted, riddled with logistical challenges, it’s time to rein it in. Your biggest risk is being let go for failing and going out on a low note. Your confidence may take a hit, and it will be hard to instill confidence in a new employer. References will be a challenge, as will tapping your colleagues for employment leads. Do what you can to redeem yourself now. If there are people on your team who have contributed to this failure, unfortunately, it’s you or them, though it could also be both of you.?

Are you making the cuts? What is your value once that is done??

Ask for an early review to learn where you stand, and how you can make yourself invaluable (if you want to stay). We will be launching an annual review optimization course this fall. Interested? Get on our mailing list so we can tell you when it launches.

If you want to leave, consider proposing a voluntary layoff package. Design it now before HR decides what these packages will include and not include. You may fare better. If you want guidance, schedule a consultation.?

For those of us who were impacted by recessions before (laid off 2X myself), the word brings a certain level of trepidation. These things are out of our control, but that doesn’t mean everything is out of our control. There’s no better time than right now to think ahead, minimize your risk of being personally impacted, and even maximize your chance of coming out ahead.?