The past few years have been tumultuous, as the COVID-19 pandemic led to a global recession, followed by job growth. In fact, although a recession is a concern again, the latest jobs report shows continued growth, with the United States economy adding 372,000 jobs in June.
“So far, hiring remains strong,” said Walden Economic Consulting President Michael Walden, a William Neal Reynolds distinguished professor emeritus at North Carolina State University. “But I believe it will slow as the Federal Reserve continues raising interest rates.”
For now, there are two openings for every person looking for a job, and employers are struggling to fill positions, said Walden.
“What is really changing the hiring process is the lack of talent that’s available right now,” said Josh VanNamee, senior director of accounting and finance at talent solutions company Vaco. “You have to move the hiring process through extremely quickly, because you’re losing talent to multiple offers, multiple companies. There’s a huge war on talent right now. Even though there are recession fears, it hasn’t changed the hiring process.”
Until job growth slows, it’s a candidates’ market, meaning job applicants have bargaining power in the hiring process.
“Right now, we have a very low supply, giving candidates all of the power,” said VanNamee. “They’re asking for things we’ve never seen before, and companies have to say yes because they don’t want to go through another hiring process.”
During a recession, however, applicants could lose the upper hand during bargaining.
“In a recession, power shifts to employers and away from employees,” said Walden.
That’s when it becomes important for job hunters and employees to understand how that shift will affect them.
Triangle’s strong talent pool, diverse business base is insulation against recession
“Anytime you have any kind of contraction, companies are going to do less hiring and are going to be looking at what their long-term costs are and be proactive in their savings,” said VanNamee. “Naturally, there’s going to be some sort of hit to the job market. As we look at the Triangle specifically, we are a little bit insulated.”
That security comes because of the Triangle’s emphasis on technology and other valuable markets that are generally safer during a recession.
“Industries in the Triangle aren’t going anywhere,” said VanNamee. “we’re heavily invested in life science, technology and health care — and those industries are not going away.”
While a recession tends to lead many types of companies to be more cautious, slowing job growth, some industries are harder hit than others. For example, tourism, real estate, manufacturing, construction and luxury retail tend to struggle.
“If you look at history, job growth is going to slow down,” said VanNamee. “In any type of slowdown, you’re going to have layoffs.”
Josh Haymond, a senior leader in Vaco’s accounting & finance practice, says major investors like Apple, Meta and VinFast, who have expansions planned, are likely to continue down that road no matter the economic outlook.
“I’d expect that large expansion efforts aren’t slowed down much,” he said. “These organizations must still build infrastructure to support future growth, and the talent present in the Triangle remains as strong as ever.”
Act now to secure your position ahead of possible recession
Fortunately, both employers and employees can take steps to protect themselves during these times. First, employees can make themselves integral at work.
“Keep your job, do good work, make sure your employer knows you value your job,” said Walden.
That includes thinking ahead, even when times are good.
“People aren’t worried now, but they should have a plan in case a recession develops,” said Walden.
For those who want to stick out from the crowd if jobs become scarce, that plan should include maintaining a LinkedIn profile, updating a resume, actively networking, and working with a recruiter, said VanNamee. Additionally, the best time to change positions is during a strong job market.
During an economic downturn, the candidate pool typically gets saturated with a higher supply of well-qualified candidates, meaning more competition for each job. “If you’re passively looking for a new position, do it now,” said VanNamee.
As for employers, they can automate processes to reduce expenses before a recession, which allows employees to spend more time on valuable work. Companies can also keep their inventories low to cushion the blow during a recession, said Walden.
“Anytime that you can automate something, you give people the opportunity to be better at their jobs,” said VanNamee. “You create a better workforce, and you also save yourself some money.”