Lots of financial gurus are carefully studying the market to try to determine when the next recession will hit. It's not a question of "if" because history shows us recessions are inevitable. As a career coach who has personally been through two recessions, I've learned one indicator, in particular, has been a very accurate predictor of recessions.
Long-Term Low Unemployment = The Good Times Will End Soon
This article discusses in detail why the economic expansion we've been enjoying for a while now is creating multiple signs of a looming recession. For me, one reason stands out the most:
Another highly reliable presage of downturns is surprising. It's a trough in the unemployment rate--counterintuitive because low unemployment shows that an economy is growing strongly. But super-low unemployment also means the expansion is pressing up against its limits. In the past 65 years, this indicator has never missed and has never called a false positive.
Complicating such a call is the fact that we can't be sure a trough has occurred until after the fact. Unemployment hit a 17-year low of 3.8% in May, then edged up to 4% in June as more workers rejoined the labor force looking for jobs. Whether that turns out to be a bottom won't be known for at least a few more months. For now, though, we can only say it's hard to believe we aren't at least very near one.
The truth is, companies are going to start missing their projections as a result of their inability to staff properly. And, with the U.S. having the highest amount of corporate debt since World War II, they will need to start laying off and cutting vendor usage to save money. That's when unemployment will take a sharp turn up.
The Trifecta That Keeps You Employed in a Recession
Being the most experienced or most tenured means nothing in a recession. If you're overpaid and undervalued, you'll likely see a pink slip. The same goes for younger or inexperienced workers. Why pay for fewer skills when you can get more skilled talent for the same pay? In short, the law of supply and demand kicks into high gear during a recession. If you don't stand out and offer the most value in three key areas, you are at risk of being let go. Those are:
- Personality - Are you easy to get along with and likable at work?
- Aptitude - Can you adapt and evolve to the changing needs of the employer?
- Experience - Do you have the knowledge and skills to hit the ground running?
Companies need to justify the cost of your employment. Thus, they evaluate you on all three aspects above to decide who stays and who goes. Yet, even if you excel in these three areas, you could still end up on the street. That's why this one strategy is so important to do right now...
No. 1 Tip: Serve Your Network Now and Save Your Career Later
Today, every job is temporary and most new jobs are gotten via referral. At Work It Daily, we tell members when it comes to your career success and satisfaction, "your network is your net worth." The best way to build a strong network is to offer them value now. That way, when the time comes for you to ask for help, your members will be willing to return the favor.
4 Ways to Serve Your Network (Today!)
There are lots of ways to pay-it-forward to your network. Here are four that are particularly effective:
- Sending personalized individual emails or LinkedIn notes checking in and seeing how they are doing so you can catch up on what each other's current career focus and strengths are.
- Posting interesting and valuable professional content on a regular basis to your social media feeds so friends and followers can learn from it.
- Identifying people in your network that would benefit from knowing each other and making a personal introduction to one another.
- Posting compliments and praise for colleagues and fellow professionals that are doing great things in your industry or skill set as a way to offer them recognition.
By committing some time on your schedule each week to serve your network, you can help establish yourself as a trusted and respected peer, committed to helping others. Then, if and when the time comes where you need help, your network will be excited to offer their assistance. Why? Thanks to your efforts, they know enough about your professional character to feel comfortable recommending you for jobs and introducing you to members of their network that could assist you.
Don't ignore the need to serve your network now. Waiting until the recession hits--or, even worse, until you are suddenly without a job--is risky business.