Maybe there will be a recession. Here’s what to do just in case
The debate continues about whether and when a recession is coming, and what the markers would be. Most of us are in no position to do the analysis ourselves, but you don’t need to be an economist to know that if people are talking about recession, you should do some thinking about what you would do if one occurs.
As a gen-Xer, I am a master of recessionary times: I graduated into one of the worst job markets since the depression and then lived through the dot-com bust.
But since we’re not actually in bad times right now, the question really is, what do you do in a job you have if you want to get ready for a downswing in the economy? Here are four ways to prepare for a job market that might turn sour:
1. Specialize
People think that if there are fewer jobs, a wide range of skills makes someone more employable. It’s not the case, though. In a tight job market, employers can hold out for the perfect fit. And if you are not clearly defined as a specialist, then you are not going to be a perfect fit for anything.
Researchers have found that you get the most benefits from specializing after you have three to five years of experience under your belt. So don’t specialize too early – because you won’t have learned enough about what you want. But if you have a few years of experience, and you see layoffs looming, try to get on some focused, short-term projects that will allow you to market yourself as a specialist in something when you have to get your next job.
2. Do something great – right now
Most people have been participants in the last decade of manic job hopping. Which means most people have followed a pattern of performing well at a company, writing those achievements on their resume, and then making the next hop. This works in a job market where you can control when you leave.
But if you get laid off before you accomplish something significant, you will end up with a dark spot on your resume – a place where you did not do anything particularly notable.
So do something now, fast, that you will be able to quantify as an achievement on your resume – as in completed X project in X percent less time than anticipated, or saved X dollars by working twice as fast as normal.
3. Consider graduate school
There’s a reason why so many Generation Xers went to graduate school: There were no jobs in the early ’90s. In a down job market, grad school is a way to enhance your skills when there are no available jobs that will do that.
One of the most popular choices is law school because a law firm provides a clear path (and an A in organic chemistry is not a pre-requisite). I have never been a fan of law school as a fall-back plan, because 44% of practicing lawyers recommend that you do not go into the field.
That said, law firms have become much more accepting of people’s personal lives since the last recession. Many law firms have retooled how they operate to give people more time to have a life outside work, and they have changed their policies to accommodate different stages of life.
Grad school is a treacherous route, though: Be careful about spending money for a degree with no career path to follow it. But also, be careful of investing in a career path you wouldn’t want to follow.
(Hat tip: Elise)
4. Focus on the quality of work and quality of mentoring
The hardest thing to do in a bad job market is to keep your learning curve high. If the market goes sour, instead of focusing on the perfect industry or the perfect company, focus on developing new skills. And then refocus your career into a more suitable industry or location when the job market gets better.
By cultivating a great mentor in your current job, you can make your job a spot where you can wait out an economic slump should one come. So instead of focusing on the negative predictions of economic doom, focus on the positive conversations that build a solid mentoring relationship, and you will weather the storm better because you won’t weather it alone.
I wonder about recessions these days. Our economy is more diversified (as far as I can tell) than it was in prior tough times.
Look at the mortgage problem – it is very geographic in distribution.
A lot of us who were hit by the bubble were caught off guard because the 90s were so prosperous. Some people (ahem) were young and carefree and lived like the party would go on for ever and our incomes would continue to grow 10-20% per year.
Stay out of debt – avoid it like the plague.
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Yes, of course, stay out of a debt is a good one. Sometimes I wonder, though, how practical the advice is. Like sticking to a diet – everyone knows to do it but few people can.
–Penelope
These lucid suggestions are equally applicable whether the job market is tough or not. I liked this writing and thought it’s a refreshing change from your normal Gen-Y posts.
Then again, human beings tend to learn not from new ideas but only from reflections of their own beliefs. Ergo my appreciation of this post only manifests my agreement with myself?
Penelope, good points though I have to agree with Gene Shiau above. I had very long comments so they are now a post. I hope you dont mind. Thanks.
I think I would add on more tip – be fearless in a recession. I don’t mean careless. However, I also am a Gen Xer who made it through the early 90s. It took three years out of undergrad, but once I got over this “whoa is me” attitude, I’ve always been able to get a good job in my field. I live in Michigan where people claim there are no jobs. And yet, I’ve always been able to get one.
Gen Xers are really educated, smart — and tough. When we stop listening to the propaganda about what losers we are, we really achieve a lot. Especially in a recession.
…”whoa is me..”” :)
“In a down job market, grad school is a way to enhance your skills when there are no available jobs that will do that.”
As a tweener Gen X/Yer (born in 77) I always wondered why people went to grad school when they couldn’t find a job. You can’t get paid, so you’re going to commit a few years of your life to something where you’re not paid, and even worse, probably be paying someone else (a lot)? How come the advice never is “try to start a business and make some money learning something”? Can’t a recession can bring many business opportunities.
Very good post. Your point of being prepared is well advised and works much better than merely reacting to a situation. I also find it helpful to collect the ‘information overload’,filter through the details, and apply the knowledge to my own situation. Benchmarks are also very important. My perception at this time is the economy is in a slow down phase and has about a 50/50 chance of a recession. Only time will tell for sure. Be prepared – Boy Scouts of America motto – works well here.
#3 really strikes it with me. I am on that fence right now. To go, or not to go. It’s a tough decision to spend the money if you don’t have a clear understanding of where you will go or what it will do for you. I also think another good piece of advice is to stir up your network. Make sure your contacts are up to date and you are starting a dialog with them. Recession or no recession, having your network of peers available is always a good idea.
I work in publishing for the home building industry. Talk about fear. I walk into work each day with a little bit of fear that I’ll be let go.
I’ve indirectly heeded your advice to help me hold on to my job for as long as I can: become specialized, become as indespensible as possible and keep working at accomplishing that unprecedented project.
I just survived one round of layoffs; I’m holding out hope I’ll still be here in a year.
It’s an interesting scenario. While the textbook definition of a recession (2 consecutive quarters of negative growth) hasn’t begun yet, there’s still the ever-present threat with a overall slowdown. People have less money to spend, and eventually they’ll learn not to spend it anyway.
That being said, grad school can be an issue. Depending on location and whether the school is public or private, you could be saddled with debt that could make the job hunt even harder. That’s assuming you can even get a loan (the mortgage “crisis” is affecting all areas of lending). My wife’s law school debt is over 165k in principal alone. So the decision is difficult.
Penelope-
You left out point #5. NETWORK. You need to build a network of professional contacts during the good times…., not once you have been laid off.
Statistics show that most jobs are found through direct contacts and referrals from networking. But I hear from people all the time who get laid off and then decide it is time to start building a network. No, no, no. You need to dig your well before you are thistry (thank you Harvey Mackay). If you wait until you are desparate for opportunity to go seeking help from others, you will look…well,….desparate.
Opportunities come from people, but it takes time to cultivate real relationships. You can’t wait until you need a job to look for people to help you. You need a supportive group of people in advance who already understand what make you unique and spectacular.
Those who have strong networks never fear the cycles of the economy.
thom
Good post Penelope. In response to your four points:
1. I was a generalist, not a specialist. That had a huge negative impact on my job search.
2. I had quantifiable stuff on my resume, it was good, but certainly not enough.
3. I had already earned an MBA. Thought that would make me “hot stuff.” It didn’t.
4. My mentors were in my company, which was fine while I was unemployed. After getting laid off, they were worthless (they don’t want to talk for legal reasons). Make sure you get mentors outside of your company.
Also, I always encourage personal branding and networking… real relationship building.
Jason Alba
You make very good points, and thom makes a very good fifth point.
There is just one drawback to being a specialist: If your industry goes in the toilet, there may be hundreds to thousands of people with your specialty out on the market. In that case, you’d better learn quickly to be a generalist.
For example, back around 1970 Lockheed laid off about 15,000 employees, and Boeing laid off 6500 at about the same time. A large percentage of these were aerospace engineers. A laid-off accountant can get a job at a retail store, a truck factory, a government office, or any number of other places outside the aerospace industry. An aerospace engineer competing with ten or twelve thousand other aerospace engineers in a down market had better be able to fall back on being a generalist.
I would like to add point #5 Master Your Own Destiny – start a business now.
I think it is imperative that we master our own destiny in these uncertain times.
Build and grow a business in time for the down turn. The security would be in the cash that you will have by then. I With cash, in a downturn , it is time to grow.
PT –
Excellent post with some very good ideas. Here are a few more from another Boomer who has been through enough downsizings, layoffs, and mergers of his own:
1)Make as many contacts as you can outside your current company. Chances are some of your co-workers will get laid off too, and while they're great to have as a support system, don't depend too much on them to help you land your next position. Get to know as many people as you can at another company in the same industry. Or, take the opportunity to reach beyond your current industry to one you've wanted to investigate.
2)If layoffs haven't happened yet, take advantage of your company sponsored tuition reimbursement program. Investing in yourself is ALWAYS a good option. It may help you specialize or provide a means to explore another career angle. Community colleges are a great option for this if you're not sure which direction to go. Most companies will still pay for the class you're taking if you get laid off mid-semester, too.
3)If you're trying to stay on at your current company, do some digging to find out what areas / departments / business units will be least effected and consider a move. If you can identify the target areas for layoffs dodging the bullet could be a good strategy.
4)Don't sit still. Employees who have been in the same position for years may be viewed as "low hanging fruit" for layoffs. Companies don't care how much knowledge walks out the door, only how much budget money they can save. Tenure is more of a liability than an asset. Experienced usually equals high priced when it comes to employees. If you can't justify your value in some manner that is meaningful to management you're a target.
woe is me :p I am a low hanging fruit. woah!
Hey Penelope,
Glad to see you’ll be on the fox business channel. I completely agree on the specialization factor. An impact of our now global economy will be increased specialization. And I think that after a even a few years in the workforce people will need to specialize.
The funny thing about your lawyer comments is that demand for lawyers is going to be on the rise. So naturally law firms will have to become more flexible to attract the top talent.
The biggest concern for young workers in this approaching resession needs to be staying with a quality job if you already have one. Now is probably not the time to quite – especially if it is for all the wrongs reasons (i.e. my boss sucks or I don’t get quality work). Young workers need to remember that you can learn a lot from any position, and if your a hard worker and seek high quality work, it will come to you. Instead power through in the short term and jump when the market gets a little better. Having a even a “bad” job is better than no job!
Thank you for the tip of the hat! Glad to be of service. I’ll be looking for you on Fox tonight!
I agree with Thom on the networking. I am looking for a job now and I had a decent network. But it wasn’t until I lost my job that I realized it needed to be a whole lot bigger – and it took a couple of months to really get into the thick of it, i.e. getting referred to one person, who mentions another person, who knows a recruiter, who has a job I may be interested in, well, you get the picture. I have created a network in LinkedIn plus I have more contacts in my e-mail address list and I have resolved to never let it lapse again. It is easy to remember to contact people when I have all this time off. But when I land a job, I am going to be checking my list of contacts in LinkedIn to see who I need to e-mail, schedule lunch with, etc. so I never need to rebuild again. Lesson learned!
As a boomer who’s survived layoff tsunamis like the Massachusetts mini computer meltdown of the ’80’s, I agree with most of Penelope’s advice above. If you are a specialist and want to maximize your job security, however, you need to keep those skills current (how many Wang VS programmers are still needed in the world?). You also need to demonstrate that you are capable of taking on assignments and driving results beyond your specific field of expertise. As a manager who’s had to make tough choices when it comes to layoffs, I can tell you that flexibility and versatility matter in terms of who goes and who stays.
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That’s a great ponint, Joyce. Specializing is not a one-time decision, but rather a constant refocusing in order to ensure you have a solid, marketable focus to your specialty.
Incidentally, I think top bloggers do this all the time — try to figure out where blogging is going so their specialized talents don’t get left behind and outdated.
–Penelope
One of the most popular choices is law school because a law firm provides a clear path…
…for BEING A LAWYER.
(And actually, a lot of the time, not even that!)
Make sure you want to be a lawyer before you go to law school. Be a paralegal at the law firm at which you hope to work. Know that for several years AFTER law school graduation, your job will be pretty similar to that paralegal job (but with much added responsibility and some added pay).
Go to law school, incur the debt, if you’re sure you’ll want to be a lawyer for at least as long as it will take you to pay off the debt. Don’t assume you will like being a lawyer, or that “IT WILL BE DIFFERENT FOR ME.” It won’t. It’s pretty standard. (See the dozens of other stories Penelope has written on this “it will be different for me because I am different” topic).
Thanks, these are some great points to consider in an uncertain time.
I always tell my clients NOT to wait until they are looking for a job to firm up their “net.” It is always preferable to network when you aren’t looking for a specific opportunity. That’s when people won’t question your motives. Once you are out of a job, that credibility is gone.
You mention getting an accomplishment or two right now to beef up the resume. Another point to add is that everyone should have a well done, accomplishments oriented resume ready at a moment's notice.
If you saw an opportunity tonight, could you confidently apply, or would you need to spend the whole evening (or longer) working on it? Don’t wait until you are looking for work to focus on perfecting your marketing materials.
Miriam Salpeter
Of all the advice you gave I think the one about keeping credit as low as possible is the most important , and I think that maybe opposite to what the current administration thinks a good number of people will use “the tax credit” to lower credit borrowings which begs the question will this be a recession or could it change to a much bigger and deeper problem with longer term implications
Steve
Your advice seems really solid. It just make sense that we’d want to specialize in something. But what?
I just know there are a hundred things I could be learning, but do I have to go to graduate school?
As a 21 year old whose almost done with undergrad, I feel like I need to get out and make money, as opposed to spending it.
Even when you have a great career, you never know what will happen to change that. Mergers and downsizing occur, layoffs happen or a recession pops up. This would be a perfect time to build a one person business while you are still working. Risk is low, if can be done on the side and if you know how to pick the right business and can learn the ropes while you are still earning you have just added a valuable skill to your toolbox and a solid net if the worst does happen.
I agree with Ivan’s #5. Master Your Own destiny – start a business now. During the 2001 U.S. recession, my online business increased 30%. It was very good year. You can learn how to do it just the way you learn anything else – one little step at a time.
WOW…I’m really shocked that you didn’t mention the importance of today’s holiday.
PT – Did you appear on FOX? I watched, but didn’t see your interview. Did I miss it?
THe mentor is one of the greatest things that a person can do to help with employment.
As I look back at my life Mentors have helped me gain greater leverage and find oppurtunities when I was too stressed or blind to see them. You are never to old to have a mentor. Finding the right mentor can help push people through the hard times.
I’m not in your demographic, but I consistently read your stuff anyway. If I were a younger person (and single) – and this recession (which seems sure to hit) were looming – I’d use it as an opportunity to help others and broaden my resume. Personally, I’d decide to teach in an inner city school (where some cities offer signing bonuses, even still). But a young person could easily find something to do to contribute that would pay them enough money to survive (hammer down the expenses during this year or two), something they found very fulfilling and something that would also expand their resume. And you never know – you just might find a brand new course to pursue.
I’m a Gen Xer that graduated in ’94 so the post has special meaning for me. The best advice I can give is be an outstanding performer & people inside & outside company will take notice.
The grad school advice is dangerous. People assume that a graduate degree guarentees them something & it doesn’t. I have an MBA working for me right now & I don’t have one. If you can go to school while working for a company that will help you with opportunities with that company then it is a good idea. If you are unemlployed & going to grad school because you can’t find a job, chances are you will still not find a job when you get out + be in debt up to your eyeballs.
P.S.-Gen Yers may know how to text msg faster than us but my experience with their job performances has been extremely sub-par. I don’t like how PT overvalues them & gives them an idea that they are somehow more neccesary than everyone else. Their value system makes it just the opposite.
Curmudgeon’s Law #3: Someone is always more qualified than you for any given job. The goal is to get them to hire you anyway. Often, you do so by engaging the hiring authorities in topics well beyond your expertise.
Being a generalist still works. I was once the second choice of five different interviewers for a job (but the only candidate who made everyone’s list). I aced the interview with the final authority because we spent two hours talking about everything but the job.
Excellent advice. I particularly appreciate #2. It’s an insightful directive at any point, but especially during a supposed recession when people may tend to scale back and hide from their goals until the economy rebounds. One of my greatest challenges, and joys in overcoming such, is helping people (specifically women) see that they can do something great-right now, like you suggested. And who knows…perhaps your doing something great right now can contribute to the recovering health of the economy at large.
Great advice – I’d add “don’t wait to look for a job”.
You’ve written about GenY’s tendency toward career-hopping before, so it’s not too much of a stretch to put these pieces of wisdom together. It might also be wise to look at job markets that are more “recession-proof” than others such as healthcare.
If you *are* laid off and can’t find a job in your field, take a job you’ve always found interesting–even if it pays less–rather than sit back and take unemployment.
After being laid off from my cushy web designer job in 2001, I spent 6 months working at a San Francisco hot dog cart. It was fun, I developed new skills and it made my resume stand out.
It proves to potential employers that I am willing to do what it takes.
1. Next week we’ll be paid again – take your credit card with the lowest total amount on it and PAY IT OFF! If the lowest total is too much to pay off, PAY HALF! Still can’t? How about 25%. Ditch the debt – pay it down.
2. Got a skill? Spring clean garages for a price, prune trees, sell pies you bake, wash cars, tutor kids – do something to bring in extra income.
3. Meet new people. People lead you to employment.
4. Be positive. You’re not going to fall through the cracks – anyone reading Penelope’s column is brighter than the average bear. You already have what it takes to move yourself to a new situation – use it!
Arrrgh. Penelope, this is soooo scattershot. I’m at a loss. Everything you’ve said contradicts a prior post.
Number 2 really strikes me – you wait until an imminent recession to decide that your resume requires accomplishments?
All workers should be aspiring to this at all times.
Economic Darwinism will weed out the slackers.
Agree with specialize, but grad school is a terrible idea. Most important thing is to have clear goals and direction, grad school doesn’t do that for you. It only works when it’s part of a focused, well thought out plan.
I graduated in the early 90s recession like others here. I have a friend who squeaked by at a lousy college near mine, but he developed a fascination with agricultural automation and crop yields. He now makes close to seven figures a year loaning money to farmers for their capital upgrades. Meanwhile, his brother got straight A’s and went to an Ivy League law school, and in his late 30s is still spending thousands on expensive career advisors, most of which his brother pays for.
In regard to specializing – I don’t think it’s either/or on specialist/generalist. Your knowledge is like a lake. You have a certain amount of water. The healthy lakes have a deep middle, and they have shallower areas. You don’t expect to see a lake that’s 2 feet wide and 500 feet deep, or one that covers three states but is 2″ deep. Those aren’t healthy systems. Have an area of expertise, but know substantial amounts about related areas. Then, too, if you see that your area of expertise is becoming less important over time (FORTRAN programmers, anyone?) you can shift your focus and, over your career, have a “trajectory of expertise” – maybe you go from being an expert FORTRAN programmer to an expert C++ programmer to an expert in some other area. Each time, you take what you’ve learned in your previous area to give you added insight and grow in your new area quicker and better.
I would add one additional item – stay on top of what your company is doing. Too many of us get caught off guard because we are so busy scanning external environments and taking our eyes off our own organizations.
Know who your company’s big customers and big competitors are and know what’s happening with those relationships.
That gives you greater insight into what is to come and could help you strategize to keep your career on track.
Networking is like research, you have to do it before you need it. A good professional network can combat any recession or sudden job loss.
Great article. I really like the specializing tip. It is one that really everyone should try to do to make them stand out more.. More importantly, you’ll be worth more in a struggling market.
Well yesterday was announced that we are officially in recession,I am looking to read somewhere what to do with what ever money I have in the bank,I have USbonds that I been saving for years ,should I cash them and have that money in my hands insted of trusting the bank,I am plannig to buy a new house because I recently got married ,should I wait because we are living in our own home but we need a larger,or should I wait.Well I have so many questions ,I have been looking for answers online in google,maybe you can send me information where to read about recession in general not just job. Hope to hear from you soon.
Thanks for reading my email.
E Meyer
I got a better way to survive recessions: buy silver and gold