How are recession fears impacting employees? Emmett McGrath, president of Yoh, a Day & Zimmermann recruitment company based in Philadelphia, shares insights from the company’s recent survey on the subject.
How is the American workforce responding to signals of potential recession?
American workers are well aware of the constant talk of economic uncertainty, and many are taking steps to protect themselves, their careers and their personal finances from potential economic volatility.
Most strikingly, according to the results of a recent survey Yoh commissioned, nearly three in 10 employed Americans (29 percent) are more likely to seek work outside of their existing job—e.g., via a second job or side hustle—to supplement their current income amid continuing talks of a recession on the horizon. This is especially true among employees under age 55, compared to their older counterparts.
Job security also remains top of mind for many employees, as the results of Yoh’s survey reveal the lengths workers are willing to go to showcase their value and commitment to their current employer. For many, now is not the time to be seeking or making any significant career moves.
How are employees seeking to demonstrate increased value?
Employees are going above and beyond to highlight their indispensability in a number of ways. According to Yoh’s research, nearly three in 10 employees (29 percent) are more likely to do more than is required of them at work—such as by taking on a new project, improving their organization’s culture, learning new skills or undergoing additional training—to position themselves as an asset to their employer in the event of a recession. Data revealed that higher earners are more likely than lower earners to be concerned with demonstrating this type of value.
Other employees are committing extra time to their job for no additional salary. Over one in five (22 percent) respondents to Yoh’s survey expressed a willingness to work more hours than are required of them—e.g., in the morning, at night and on the weekends—without receiving additional compensation to protect themselves if an economic downturn hits. To be sure, the remote working model that many Americans are currently operating in has made it easier to make this investment of greater time and energy.
We’ve also found that some employees are even putting their own professional development aspirations aside—at least momentarily—in pursuit of what they believe to be the best financial interest of their company. Some respondents to Yoh’s survey indicated a willingness to take a pay cut to avoid being laid off, and other respondents said they were less likely to actively seek a raise or promotion. Interestingly enough, parents are almost twice as likely to take a pay cut, according to Yoh’s research.
Is there a limit to how far employees are willing to go?
Absolutely. In no way should employees’ attempts to showcase their value be interpreted as absolute or one-sided. Organizations still have a responsibility to treat and compensate their employees fairly and consistently. Those companies that take advantage of the goodwill of their employees certainly do so at their own peril.
A majority of employees still demand accountability from their employer. According to the same Yoh research, 83 percent of employees are not more willing to overlook their company’s failings despite the current economic uncertainty and multiple rounds of layoffs in certain industries, such as tech.
Employees remain not at all shy about speaking up and speaking out when it benefits them or their colleagues. So, a collaborative relationship between companies and their employees—one marked by mutual trust and respect—is key as organizations continue to navigate potentially volatile economic waters.
At the same time, compensation rates remain nonnegotiable for many employed Americans. Although some respondents to Yoh’s survey noted a willingness to take a pay cut to avoid being laid off, 89 percent still did not. This general hesitancy holds true even when taking into account respondents’ annual household income and education level.
What is the best course of action for HR and other organizational leaders to take in response?
It’s worth noting that employee sentiments are not permanent and may very well change in the weeks and months ahead. If the economy takes a rapid nosedive, some may become more agreeable to dramatic changes in their work arrangements, responsibilities and compensation packages.
Alternatively, if indicators, such as inflation, begin improving and the economy appears able to weather the current storm, employees may be less likely to forgive employer missteps. Even with the current threat of a recession, 23 percent of respondents to Yoh’s survey indicated they were still just as likely to consider working for a new company as they were to stay at their current organization.
Ultimately, organizational leaders would be wise to continue outwardly expressing appreciation for their talent. Those in HR departments are critical to advancing this effort.
Leveraging internal communication channels to foster camaraderie, remaining as transparent as possible with employees to ensure they are well informed about the direction of their employer, and arranging for small gestures—such as a company-sponsored happy hour or small token of gratitude—can go a long way toward cementing positive employer-employee relations.
When leaders can meaningfully and genuinely show they’re in touch with their talent, anything is possible.