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A Right Recruiting Newsletter, 2/2008
To date, my career as a recruiter has lasted through 4 recessions: 1980, 1982, 1991 and 2001. While each has been progressively less severe, they all affected employment in similar ways. It is important to remember that recessions are not just abstract statistics. They affect people like you in very personal ways. While it is possible to plan for a recession, in many ways whether a recession touches you can be random. You may just be in the wrong place at the wrong time. You may work for the wrong company or boss. You may have just taken on some debt unaware of pending layoffs, etc. Sooner or later in your career a recession will touch you. For those who haven’t gone through it yet, here is what you can expect.
The most obvious effect of a recession is a layoff. Let’s put that aside for a minute and explore how a recession can affect you even if you are not laid-off. You don’t have to be out of work to be affected by layoffs.
As we often remind people, the employment world is a market. Jobs, salaries, benefits and promotions are not determined in a vacuum. Sure, maybe you can get a nice raise if you do your job well but underlying that “feel good” reason is the cold hard reality of the market for your skills. If your employer knows that you can walk out the door and get another job in a day, you will be amply rewarded for doing a good job. On the other hand, if your employer knows that jobs are in short supply, you will just get a pat on the back, at best. Don’t kid yourself. The realities of how a recession affects you, even if you are employed, can be mighty unpleasant. Here are a few:
1) Your raises will stink. If you’ve been complaining over the last few years when you get 5% raises, try a 10% pay cut for size. Ouch. That will happen to some of you.
2) If others are laid off in your group, they will not be replaced. You will have to pick up the slack. Today’s comfortable 8 hour work days will morph into 10-12 hour work days with weekend work expected.
3) Forget taking time off to watch your child’s soccer game. Use vacation time. If you don’t have vacation time, tough.
4) Promotions? Forget it. Your boss is struggling to keep his job too. If anything, the last thing your boss wants is a visible, cheaper rival for their own job.
5) Pretty proud of that big raise you got last year when you accepted a counter-offer to stay? Don’t be. CFO’s have long memories and now you are just the highest paid person in a department under financial stress. Don’t underestimate how quickly you can go from irreplaceable to outrageously over-paid.
Even for the employed, quality of work life deteriorates pretty dramatically in a recession. Employers will play this to their advantage and, unfortunately, there is very little that you can do about it. One consistent message that we have tried to get across is this - if your career has not progressed during a time of corporate and economic growth, trying to correct that in the middle of a recession is folly. You will have few, if any, options.
Perhaps I am painting a cold and bleak picture of how companies treat their people. Maybe so, but I think I am pretty accurate. In 28 years of working with local companies, I have found only a handful of firms, all of which are privately held, that consistently treat their people as assets. The pressures on corporate executives and managers during a downturn are enormous. The people above you need to turn in good results to keep their own jobs. Hence, they need to get more out of you. That doesn’t mean they are Satan. If you get to that level you will probably do the same thing too. It’s the way the system works.
Wow, if working is so bad during a downturn, how bad can it be when you get laid-off? For some, it can be catastrophic. For most, it’s just plain frightening. Here is what happens:
Most people assess their marketability by their past experiences. For the last few years, you’ve gotten recruiting calls consistently about new jobs. You check CareerBuilder regularly and there are plenty of options. That’s been your experience so far and since you are the same person in 2008 as you were in 2006, you should still be sought after. For years, the market came to you and you expect that it will continue to do so. You’ll be fighting off offers. Wrong. Here is what will happen:
1) You will answer ads and never hear back. You will not understand why because you think you fit the job. Then you will notice a minor requirement listed in the ad for one thing (industry experience, years of experience, technical skill, etc) that you don’t have. In a good market, companies interview people with 80% of the required skills. In a bad market, they want 100%.
2) You will eventually get a call from an HR person for a screening interview. They will ask your salary requirements. When you give a figure they will say that’s too high and then hang up. End of story.
3) You will get an interview. You will be kept waiting for 30 minutes in the lobby and will go through a series of meetings. You will be surprised at how coldly you are being treated. At the end of the day you will ask how long it will be before you hear back. You will be told that second interviews will be scheduled in a month after the 20 first round interviews are finished.
4) You will contact recruiters and will be stunned to find that even recruiters, who you initially hoped would “sell” you to their clients, will screen you out. Many people are not aware that during a downturn, recruiting firms like ours get more business. However, the recruiter function changes from candidate identification to candidate selection. In other words, the candidates are more available and easily identified. The recruiter is expected to select the best ones for the client to interface.
For those laid off in a recession, a small percentage never get back on track. They move to a different field. They move to a different part of the country. Lot’s of bad things happen to them. Fortunately, that’s a small percentage. For most, the experience of being laid-off can run from slightly unpleasant to intensely unpleasant. On the mild side, it can be a few weeks or a month of looking for a job. On the more intense side, it can lead to months or a year of searching for a job, sleepless nights and self-doubt.
I gave some advice on how to prepare your career to best protect you from a lay-off in a newsletter I wrote a few years ago, “Lessons From A Recession”, accessible under the newsletter tab in our web-site www.rightrecruiting.com . Beyond that, the best advice I can give you is to have money in the bank. Cash solves many career related problems. A level of financial security means you don’t have to take the first Mickey-Mouse job to pay the mortgage. It means that you will interview better because you will be less nervous and it means you have a better chance of riding out the storm. Sooner or later a little rain falls on everyone’s career. It’s good to have a raincoat.
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