7 Frightening Realities of the Post-Recession Economy

by Vault Careers | October 26, 2011

The recession ended over two years ago, but if you’re one of the protestors occupying Wall Street or among the millions still looking for a job (or a better job), then you probably didn’t notice. The bad news – things are not likely to get much better any time soon. The economy remains stagnant and political parties fight for position; protestors are growing in numbers; and the unemployment rate has shown no real signs of improvement as we head into 2012.

All of that is likely to continue reshaping the employment market, and will affect everything from your ability to conduct a salary negotiation to the pace at which you can expect to climb the ladder—or even get on it in the first place.

So what’s a job seeker to do? Here are some trends to look out for in the short and medium term as careerists continue looking for work in a frightening post-recession economy.

1. Doing more with less

The theme of this troubling economy has been to do more with less. This theme has run across companies, both large and small, in the post-recession era. After sacking thousands of employees in order to cuts costs, pummeling employee morale in the process, managers focusing on the bottom line remain hesitant to hire more bodies in order to explore more avenues of business, even when profits begin to pick up.  Despite layoffs and hiring freezes, work still needs to get done.  Companies are not going to cut back on how much work must be performed to turn a bigger profit.  Instead, they simply turn to their existing employees, put a cool hand on their shoulders, smile, and ask them to take on increased duties.  Those who fear for their own job will not say no.  When companies see that the work still gets done, they no longer feel the need to hire and thus begin a cycle that continues today and will continue tomorrow. 

2. Held back by housing

According to the National Association of Realtors, existing homes sold at an annualized rate of 4.9 million units in September.  This number is only slightly ahead of the 4.77 million rate in June, which marked a 14-year low.  With the U.S. housing industry still sluggish, homeowners who want to sell are forced to stay right where they are.  What does that mean?  Well, for those who are unemployed and struggling to pay their mortgage, it means a lot.  If they can’t move, they are forced to limit their options when it comes to the job search.  Those job seekers are stuck looking in the immediate vicinity for work and their options to relocate become seriously limited - not unless you want to add on the extra expense of paying rent while you wait for your home to sell. 

3. Choose your education carefully

It's a truth universally acknowledged that applications to schools surge during a recession. There are no jobs, so why not get more training and make yourself a better candidate when there are jobs? Makes sense, right?  But there are some disturbing figures to consider when the highly held belief is that the economy won’t be improving to acceptable levels for some time.  First, graduates are not finding work.  The unemployment rate for young college graduates reached an all-time high in 2009 and according to government figures 33% of people ages 20 to 29 were unemployed last year.  Higher education is not helping students get ahead in this economy with many graduates having to make ends meet in jobs they are overqualified for, such as waitresses or bartenders.   Not finding work is no excuse to not pay your loans.  The Federal Reserve Bank of New York reported that the amount of loans taken out by students last year hit the $100 billion mark for the first time. To make matters even worse, the total amount of outstanding student debt is expected to pass $1 trillion for the first time ever this year.  That debt won’t go away and will become an albatross around the necks of students, even if they end up finding the jobs of their dreams.  There is nothing like being successful and still being unable to make ends meet. Choosing education has become a much more difficult decision to make. 

4. Age diversity

An aging workforce is going to continue to be a big challenge for employers, who increasingly prefer to cut costs on training for new positions. Compounding this is the fact that people are delaying retirement because of the recession. While gender and racial diversity will remain critical concerns, age diversity presents a new challenge for the corporate world. 

5. More short term jobs

The recession might be over, but unemployment figures have remained the same at 9.1%. This has forced Americans to look at jobs differently, with many accepting temporary and part-time positions rather than holding out for full-time permanent work. That's helped the underemployment rate remain sky-high—climbing from 16.2% to 16.5%—and there are no signs of it changing anytime soon: retailers are expected to hire around the same or even lower than the 627,600 seasonal holiday employees that were hired last year. 

Those hiring this holiday season include Macy’s, which plans to add 78,000 temporary workers; Fedex, which will add 20,000 temporary employees to its workforce; Kohl’s, which will hire 40,000 seasonal workers; and Toys R’ Us, which is expected to hire 40,000 new workers to deal with the holiday rush.  While some temporary workers might find full-time work, more than likely, when those temporary positions end, the unemployment rate will go right back to where it was before they were created. 

6. The importance of internships and volunteering

Because there is still a shortage of jobs, landing an internship is going to be more important than ever. Despite increased competition, if you're a college student or looking to break into a new field, they're an integral part of your next career move.

Starting in high school, students need to cultivate paid or unpaid work experiences that build skills, character, work ethic and resume. Employers use internships to prescreen and hire talent. Your career currency comes down to the following equation: internship experience + skills. This is how you get your foot in the door and demonstrate your passion for your field of interest.

Because competition for internships is so high, another possible avenue for job seekers is to volunteer your services.  Unpaid labor is hard to pass up, especially in the non-profit industry, which, at times, struggles to pay for a full-time work force and can use the help.  The skills you pick up at these companies is transferable to other jobs within your chosen industry. 

7. Negotiate a package, not a salary

While the recession has affected the number of jobs and the kind of compensation on offer, it hasn't changed how you should approach salary negotiations. However, what you negotiate for might change. While salary increases, stock options and signing bonuses might be in shorter supply, there might be opportunities to for other types of compensation such as at-risk pay based on milestones achieved, paid time-off and a flexible work schedule.

You should value the entire package and quantify everything. How you do that is up to you. Your compensation number should factor in what is essential to you and what is non-essential. You could even give weights to the essential and the non-essential in determining the value of your offer. As an example signing bonus, relocation, 401k match, day care and base salary could get an 80 percent weight while the other 20 percent would fall under extra vacation, nicer title etc. At the end of the day, each person will be different on what they value and what they consider essential.

--Jon Minners, Phil Stott, Alex Tuttle, Vault.com

Filed Under: Job Search | Workplace Issues


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