The US job market has enjoyed one of the longest periods of prosperity despite many economic challenges. However, anxiety about job security is on the rise according to research done by Joblist.com:
“The job market remained relatively stable in Q2 despite growing concerns about the broader health of the economy. Job growth continues to be strong, and the unemployment rate is holding steady at 3.6% – its lowest rate since January 2020. Yet, as consumers and businesses grapple with inflation, rising interest rates, continued supply chain, and COVID-19 disruptions, many worry that a recession is around the corner. Although the job market has proven largely resilient up until this point, the future outlook appears increasingly uncertain.”
This was published on July 11th, 2022.
Fast forward 2 weeks. And, on July 28th, 2022 the US Bureau of Economic Analysis reported that the economy contracted for the send straight quarter hitting a widely accepted rule of thumb for a recession.
Given these uncertain times, we did our own research to understand how generations are viewing the job market and how we can survive it. We’ll cover three main points:
- How concerned are generations about being laid off in the next 12-months?
- What game plans do generations have if they are laid off?
- What advice would members of different generations give to survive a layoff?
Job Market Outlook
Our survey was conducted using HubUX and included video questions instead of text-based open ends. These video open ends along with using Research Defender’s screening API, ensured we were talking to real humans.
Gen Z and Millennials are significantly more concerned that they’ll be laid off in the next 12-months than Gen X and Boomers (those of us over 41 years old).
We asked 300 people, “How concerned are you about being laid off in the next 12-months?” Gen Z and Millennials stated they are two times more concerned than older generations.
|Gen Z||Millennial||Gen X||Boomer|
|I am not concerned at all||43%||33%||55%||81%|
|I am somewhat concerned||30%||40%||32%||8%|
|I am very concerned||26%||27%||14%||11%|
We then asked our participants a few video questions about their view on the economy and here is what they said. Please note that I choose the videos that had the broadest representation of what was said. If you’d like access to this data, please email at email@example.com. I’m happy to share it with you.
Let’s start with a Gen Zer and Millennial.
Ok, now let’s hear from Gen Z and a Boomer.
Let’s break it down for Gen Z & Millennials. There are two primary concerns that repeatedly surfaced:
- They are very concerned that employers will have economic headwinds because of increased interest rates and gas prices which will cause companies to lay people off.
- These economic headwinds will result in job opportunities drying up. This is especially concerning for those who are about to graduate and enter the workforce as they are carrying a large amount of debt.
Now, let’s focus on the older generational cohorts: Gen X & Boomers:
- Since Covid, more people are working for themselves or just retiring. This is creating a hiring void for employers which is increasing job opportunities.
- Companies are busier than ever coming out of Covid which will continue to drive their need to hire.
- Public sector jobs like teaching will continue to be in-demand despite any economic headwinds.
Our sample included 85 employers. These are individuals who are either operators or responsible for staffing in their firm.
If you are an employer, I’m sure the recent quote from Fed Chair Jerome Powell will resonate with you, “You have two job vacancies essentially for every person actively seeking a job, and that has led to a real imbalance in wage negotiating.” The imbalance of jobs to available employees has led to the most competitive job market I’ve seen in my 25-year career.
However, the ever-increasing employee expectations are simply not sustainable for companies that need to achieve a profit.
Even one of the best performing companies, Netflix, is struggling to be compliant with their DE&I mandates from their LGBTQ employees.
In January of 2022, the nation’s largest LGBTQ advocacy group excluded Netflix from their Corporate Equality Index. “The Human Rights Campaign suspended the streaming giant’s CEI score for 2022 in connection with the company’s handling of Dave Chappelle’s 2021 special ‘The Closer.’”
Prior to being remove from the Corporate Equality Index, Netflix scored a perfect 100.
If you have not heard, The Closer was a 2021 stand-up comedy special performed by Dave Chappelle for Netflix. It included, according to Wikipedia, “jokes about the discrimination against the African American community relative to the discrimination against the LGBTQ community. The special received a mixed reception from critics while some LGBTQ groups called for the special’s removal from the service and some Netflix employees criticized and protested Chappelle’s jokes about the transgender community. Netflix CEO Ted Sarandos repeatedly defended the special as freedom of artistic expression.”
If you have followed Netflix’s hiring ads and public statements, they had literally done everything perfectly in support of the LGBTQ community up to this point. However, some of their employees & leaders in the LGBTQ community took a very different stance than Netflix on this one point which had a huge market impact on employee retention and, you can argue, company performance.
This employee-first market pressure is requiring companies to spend as much or more time and treasure on employee experience as they do on customer experience. Examples are a 4-day work week, less real-time availability of key staff, and overall less accountability.
However, if there is a job correction, our data shows that employers believe a slowdown in the job market will have some positive outcomes primarily centered around their ability to meet the demands of employees:
- Employees will have less ability to demand benefits, working conditions, etc.
- Salaries will stabilize
- Less or no “sign-on bonuses”
- Less employee turnover as employees prioritize stability over potential benefits
Lets hear from one of our employer participants…
As of July 2022, many companies have announced job cuts including Tesla, JPMorgan Chase, Redfin, Coinbase and Netflix. In fact, Netflix just announced a second round of layoffs to include ~300 people.
Why Do Companies Do Layoffs?
Bad news is bad news. But, understanding the why can help many of us mentally cope with aftermath.
So, you may find it helpful to understand the business rational for layoffs. And, by understanding a bit more about why companies do layoffs you are more likely to recognize when they are coming and be proactive to avoid or even profit from them.
Overall, the 300 people we interviewed were positive about the job market despite the difficulties many companies are and will face because of the recession. There will be a lot of job transition as some companies thrive while others suffer and even go out of business. Here is what a few people said…
I can speak to the topic of layoffs with some authority. Having built a company from 0-200 full time employees and having been the CEO of a 400-person firm, layoffs are a normal part of any company’s lifecycle. There are a few reasons for this:
Reason 1: Obsolete Function
Healthy companies are in a perpetual state of improving both profitability and growth. Put simply, they invest in systems, people, and technology that allows them to make more money with less resources.
Here is an example from the warehousing industry: Hiring challenges, workers’ comp, and the promise of more efficient and profitable operations are forcing companies to invest in warehouse automation. Definitionally, automation is designed to replace people. By replacing people companies realize a significant amount of savings over time along with productive improvements.
Reason 2: Improved Profits
Lower wages in other countries are driving companies to move jobs from the US. For many US companies that have 50+ employees doing a similar job function, like program or QAing surveys, they can realize a significant cost savings by moving those jobs to countries like Bulgaria or India. I know because I’ve done it. This isn’t an easy transition, takes a long time, and is usually easy to spot if you are employee.
Reason 3: Economic Downturn
This is the hardest one to cope with because employees usually don’t have visibility that there is an issue until they are laid off. And, as we enter a recession this is what many of us will face.
In all cases, layoffs have nothing to do with the employees that are impacted. Tens, hundreds, or even thousands of your peers are losing their jobs too. You are not alone.
However, even with the knowledge that you are not alone, being laid off will likely put you on tilt. And, that is why it is important to have a plan while you are in a sane and safe state of mind.
What to do if you get laid off?
We asked 300 people what they’d recommend to those who have been laid off.
Our survey included a few video questions and here is what they said. Please note that I choose the videos that had the broadest representation of what was said. If you’d like access to this data, please email at firstname.lastname@example.org or DM me on LinkedIn. I’m happy to share it with you.
As of today, August 15th, 2022, there is no question that companies are starting to do layoffs. Here are some helpful tips to ensure you are well prepared for whatever comes.
Tip 1: Stay Positive & Proactive
Here is one of our participants talking about the importance of being proactive and staying positive.
Tip 2: Start Saving
Having a savings is vital. This was the number one tip given by our participants who were 30+ years old.
Standard financial advice says you should have enough cash in your savings account to live on for three to six months. Sadly, according to research done by Bankrate, “51%, of Americans have less than three months’ worth of emergency savings.”
Tip 3: Create a Budget
Having a budget is the best place to start when increasing your savings. As you go through the budget process, classify each of your expenses as “mandatory” or “optional”. This will give you two numbers:
- Your current budget
- Your emergency budget
Tip 4: Add Margin to Your Budget
Margin is vital to successful planning for a difficult financial time. The most common rule of thumb for creating a household budget is that “At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items.”
Add margin in your budget.
By identifying discretionary budget items you can remove, like $8 dollar coffees, you’ll be well prepared to react to whatever comes rather than trying to figure things out when you are emotionally and mentally on tilt.
Tip 5: Your Network
The size and quality of your personal network is directly connected to the number and quality of the job opportunities you have. So, invest in your network.
Tip 6: Your Skills
For most of us who have jobs, especially for a long time, we slowdown or even stop investing in learning new skills or developing the ones we have. We need to be in a constant state of learning and evolving to keep pace with today’s work.
Tip 7: Side Hustle
Developing a side hustle such as occasionally driving for Uber or doing some side consulting will ensure you are setup to lean into these income sources if you are laid off.
Tip 8: Minimum Wage Job (Be Humble)
If you have bills, then you likely need an income. Too often people who are capable of doing menial labor but have spent the last 20 years in management simply can’t “lower” themselves for a few months. Not only can this help put food on the table but it may offer you a new perspective on challenges facing frontline workers which may serve you very well in your next gig.
Tip 9: Recruiters
Be sure to get to know the staffing agents and recruiters in your field. For Market Research, you can join the weekly MRxPros’ Virtual Lunch (DM me for a free invite) as well as the Insights Association to easily make those connection.
Tip 10: Unemployment & Food Stamps
Don’t be too prideful. These are services that you have paid into and are setup to help you get through tough times.
I’m thankful for the advice given by our participants. Through them, we have created the most comprehensive list of both preparation and survival tips to not just survive a layoff but thrive through it.
If you would like to learn more about this research or about how you can use HubUX to shorten timelines and save money, you can contact Eric Santos at email@example.com.