As reports of large tech layoffs and skyrocketing mortgage rates continue to dominate news headlines, an increasing number of U.S. workers are concerned about and preparing for economic uncertainty. And that is putting even more pressure on HR leaders.
The latest Workforce Monitor Survey by the American Staffing Association and Harris Poll found that many employees, in fact, are not just worried about the threat of a looming recession—some feel like it’s already arrived. The survey of more than 2,000 U.S. adults found that 77% feel that the U.S. economy is either on the road to a recession or already there. That sense of economic uncertainty is driving 58% of respondents to look for a second job or “side hustle” within the next year, with those results even higher for Gen Z (72%) and millennials (67%).
Many employees are also starting to worry about their job security, the survey found, as 62% of respondents noted seeing cost-cutting measures at their workplaces or that they have received internal communications from management regarding potential recession measures. Of these workers, 32% with annual household incomes of less than $50,000 have already experienced or heard about reductions in hours at their company.
See also: The HR troubles with Twitter’s layoffs, and how to avoid them
“The effects of a recession are hitting workers across business sectors—including tech and social media companies, e-commerce and real estate,” says Richard Wahlquist, president and CEO of ASA. “As employers focus on reducing expenses and belt-tightening, workers are considering turning to second jobs or extra shifts to make ends meet.”
And business leaders are just as concerned.
A new survey of more than 300 U.S. CEOs conducted by EY, for instance, found a staggering 99% of respondents are expecting a recession. Nearly 60% predict it could be worse than the last financial crisis of 2007-09 and a similar amount are concerned about the new factors that could be at play in a potential recession, including ongoing talent shortages and the pandemic.
PwC’s Wes Bricker, U.S. Trust Solutions co-chair, agrees that, while the biggest concerns he hears from his C-suite clients center on economic uncertainty, business leaders need to respond to the uncertainty with strategy. In particular, they should think about the long game—sustaining their business after a potential downturn—when it comes to how they plan their response.
“That means investing in the long-term—where those investments go in the balance sheet and not the income statement,” he says.
For many organizations, that will include becoming more “selective” in their talent search, focusing on unique skill sets, rather than hiring for particular roles, says PwC’s Kathryn Kaminsky, U.S. Trust Solutions co-chair.
“This focus on certain skills sets,” she says, “will be in part motivated by pressure on companies to lower overhead costs overall, including across employee compensation.”
As HR participates in scenario planning conversations, it’s important to bring to the table the questions that could inform talent investments, Josh Bersin recently wrote. These include: “Are employees becoming more productive or less? Are we pinpointing current market needs or chasing the old game? Do we have to hire this fast? Are we doing everything possible to arm current employees with the skills that will take the business into the future?”
Apart from bringing a high degree of empathy—particularly as research demonstrates both leaders and employees alike are worried—Bersin says, it’s up to HR to contribute “critical thinking and planning [to] help your company prepare for the unexpected.”
Financial wellbeing is increasingly important to employees, making it a critical issue for HR leaders. Learn more at HRE’s Health & Benefits Leadership Conference in May in Las Vegas, which features a learning track on the topic titled “Helping Employees Boost Financial Health” as well as a keynote by Bersin titled “Benefits for the Transforming Workplace.” Learn more and register here.
