If you follow financial news you probably know that we are currently in one of the longest periods of economic expansion in United States history. Expansion is the opposite of a recession. Business activity grows, jobs are plentiful and consumer spending rises. These periods are cyclical, and unfortunately, history shows that eventually the tides turn and either growth stops or begins to reverse.
When the economy stagnates or begins to show signs of recession, many jobs can become vulnerable. There are several ways, however, to defend against layoffs. Through a combination of awareness and preparation, you can retain control of your career regardless of the economy. Here are some tips on how to keep your job during a recession or economic downturn:
Always be aware of your vulnerability within your organization
Preparation for an economic downturn should begin during the good times. Make sure you understand how your company makes and spends money. When things are going great, and bonuses and raises are common, don’t become numb to a potential sudden reversal of this good fortune.
Look for ways to reduce your company’s costs, even if it seems like business is going well. There are always ways to increase operational efficiencies. If you are an employee who significantly contributes to income or savings, your employer will be hesitant to let you go.
Success in this area means knowing your specific role in your organization’s financial machine. If you cannot identify ways in which you contribute to success, ask for new duties and responsibilities now before you become nonessential.
Foster open communication with your boss
Be proactive with your manager, especially when the business hits a rough patch. When markets and sales take a tumble, be prepared to outline your value in helping during a downturn. If you are positive that layoffs are coming, you have nothing to lose by trying to avoid their effect on you.
Take steps to keep the lines of communication open between you and your employer. This is not always easy. There can be a tendency to seem desperate that may not seem sincere to your employer. Control the conversation in a respectful and business-minded tone. Rather than desperately begging for job security, discuss how your efforts can help the company rebound. Offer ways to save money that do not involve layoffs, and be open to alternative arrangements in pay or hours.
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If times are good, but you feel like you are expendable in your company, look for more job security before it’s too late. Once you have increased your awareness about your role in your company’s financial machine, and fostered open communication, you may find that you are expendable. Don’t wait for a layoff to realize this truth or act to change your fate. Look for a job where you are valued and have a direct impact on your employer’s bottom line.
Some jobs are recession-proof, or at least recession-resistant. Industries such as senior care, IT, energy, medicine, education and accounting each have weathered prior economic downturns. Why? These industries deal with necessities. People may still look for ways to budget and tighten their belts, but economic activity will persist in these areas.
An offensive strategy against a recession can also mean choosing a career where you have more control over your income. Some jobs put your destiny in your hands, such as sales positions. These may be risky when spending dips, but a commission-based job is less vulnerable to layoffs, so long as you are prepared to work harder for your pay. You may make less money due to reduced economic activity, but as a commissioned employee you will be less of a cost to your company.
Most importantly, if you work in a dying industry, get out before it’s too late. During the last recession, housing-related jobs were hit the worst, but it was not the only vulnerable industry. Hospitality, finance, retail and manufacturing all struggled as well. The connection is clear. These are areas where consumers and business can tighten the belt. If your job depends on consumers having extra cash, you might want to look for a backup plan yourself.
Create a secondary income source as a backup
One way to weather a recession is to earn supplemental income during the good times. The gig economy can connect you to extra income. Today it is easier than ever to make money with a computer and a slice of your free time. A few years ago, making money from home seemed like little more than a pipe-dream or potential scam, but millions are benefiting from the sharing and gig economy today.
A second job can help if you need to dial back hours at your main job to avoid termination. Many gig economy jobs are resistant to economic downturns, and some freelance positions actually thrive in a down market. Think about the recession-proof jobs we discussed. Freelance bookkeeping services are an example of a gig-based way to earn money even in rough economic times. In fact, if employers resort to layoffs, they may be looking to recast many positions with contract or freelance workers.
Take the time now to develop financially rewarding skills. One of the benefits of the gig economy, for employers and workers, is its scalability. You can find some freelance work where you have the opportunity to make a few extra hundred dollars a week or each month. Once you are established, you will have more control over dialing your workload up or down according to your needs.
Job security results from a combination of knowledge and preparation. Remember that almost no one is immune from a layoff, but you can control some of the factors that lead to job loss. This approach does not have to require mass paranoia. Recast fear of the unknown into ownership of your future and you will have less stress and more success.