More than half would go so far as to take a pay cut
With business leaders and economists anticipating a recession sooner rather than later, employees are sweating, and it’s not due to the summer heat.
Three out of four (78%) American workers are fearful they will lose their jobs, according to a survey from Insight Global, a national staffing services company. The survey of 1,004 American workers was conducted in June, as several major brands in the country began trimming their workforce.
Nearly half of managers (49%) are more worried than non-management employees (34%) about losing their job if there is a recession. Furthermore, 87% of managers say they would be likely to lay off employees should there be a recession.
Read more: How HR leaders should manage layoffs ahead of recession
Meanwhile, 56% of American workers say they don't feel financially prepared for a recession or they don't know how they would prepare for a recession. More than half (54%) would be willing to take a pay cut, even with inflation at a 40-year high, to avoid being laid off if there were a recession.
Over the past month, JPMorgan Chase & Co., the biggest bank in the U.S., and Coinbase, the biggest crypto currency exchange in the country, have both laid off hundreds of employees. Streaming giant Netflix followed suit, announcing its second round of cuts within two months. Two weeks ago, Tesla went one step further by closing its San Mateo, CA-based facility, laying off hundreds in the process. With the housing, crypto and tech markets all facing upheaval, more companies are expected to make drastic cuts in the months to come.
“It's unfortunate we're already seeing some companies turn to mass layoffs because I believe layoffs should be the absolute last resort,” said Bert Bean, CEO of Insight Global. “Instead, I encourage leaders to consider other solutions, such as building a plan that avoids layoffs and helps you grow through a recession. Get your employee base executing on that, because when you bounce back from a recession, you'll need your people more than ever.”
Of course, HR leaders who experienced the global recession of 2008-2009 are better positioned to weather this potential storm. They’ve learned what works and business leaders will be turning to them to take the helm. As for HR professionals who are about to enter uncharted territory, this will be trial by fire.
“You never know how long these scenarios will last,” Jaemi Taylor, managing director in the HR practice of Allegis Partners, told HRD. Before joining the New York City-based executive search firm, Taylor spent nearly 20 years recruiting HR leaders, having worked for Robert Half, Beacon Hill and ChapmanCG.
“I’ve worked with HR leaders during COVID who asked the CEO or the board for more time, whether that’s a quarter or a month, before making drastic cuts,” Taylor says. “You want to review critical hiring, determine critical business initiatives and most importantly, avoid knee-jerk reactions.”