- The Great Resignation began in 2021 as workers sought out higher pay, greater fulfillment and balance. Quiet quitting isn’t quitting at all.
- In a recession, businesses cut costs including slashing payroll, making it a hard decision as to whether one should quit or wait for the economy to recover.
- There are various advantages and disadvantages to quitting a job in a weak economy, but each person has to decide on their own if it makes sense or not.
There’s a quiet guy in my town who is known for being the longest standing employee at Chrysler, he retired during the pandemic but still gets a free lease every other year for himself and his wife. He does have some great stories about the dealerships in the area and the times he drove Lee Iacocca around, mixed as the reviews of that professional legacy might be now. He is certainly someone to be admired, toughing things out over 54 years with the same company. Admirable, but not something I would ever try to emulate.
Gone are the days of working for a single company your entire career. Since the pandemic, employees have been quitting their jobs at historic rates. With the economy slowing and economists raising alarms about a possible recession, is it still safe to quit your job? Or has the period of the Great Resignation ended at the inevitable terminus that older generations told us it would? Quitting to find something better has its pros and cons, quitting to take time off to enjoy life and find some missing pieces therein is a luxury, certainly more enlightened a luxury than an overpriced work wardrobe in the WFH era. But is a more sensible one?
Let’s take a good, hard look before giving our two weeks.
What is the Great Resignation?
The Great Resignation, coined by Texas A&M University professor Anthony Klotz, began in early 2021 as employees started quitting their jobs at record rates. By the end of 2021, 47.8 million people left their job for other positions. Compare this to 37.7 million people who quit in 2017. As of August 2022, the pace had not slowed.
While there are various factors for this ongoing trend, most people point to increased pay, a better working environment, and a better balance as reasons for leaving.
The job market during a recession
When a recession hits, the typical reaction by employers is to freeze hiring. This protects the bottom line until more information about the recession is understood, like severity and length. If economists agree that the downturn will be short-lived, a hiring freeze may be the only reaction.
However, if the recession is prolonged or severe, many employers will eventually take the next step and begin laying off workers. For example, during the Great Recession of 2008-2009, the unemployment rate peaked at 10%, more than double the average rate.
Advantages of quitting during a recession
There are several good reasons why you should quit your job, even if the economy is in a recession. The biggest one is unhappiness in your current position. The pandemic opened many people’s eyes when it came to work, particularly around balance and the need to work from an office. Many people realized they were spending the majority of their time at a job that did not satisfy them and, furthermore, that the scope of their job had creeped beyond a reasonable expectation. Many also realized that they wanted something more, either a different life experience or a better job.
Some people have really taken to remote work. If their employer is not offering this work situation or requires employees return to the office, it could be a reason to look for another job. Other businesses in the same industry might offer work-from-home opportunities or even a hybrid schedule.
Also, the pandemic made many people realize they wanted more control over their finances and their lives, particularly their time – this is the actual definition of quiet quitting, when people work a strict 9 to 5 schedule and offer their employee nothing beyond the relative minimum expectations of their job.
Another reason to consider actual quitting is the industry you are going to be working in next might not be especially vulnerable to the current downturn and pending recession. Depending on the recession, not all sectors of the economy will be equally effected, and only some industries will actually lay off workers. If the recession is mild, travel and leisure jobs might be among the only ones effected. The problem here is that no one knows the recession’s scope until it is well underway. Looking back at the Great Recession, no industry was spared. That’s not the expectation for this recession.
It is important to remember that employers are still offering higher pay. Even though inflation has slowed some wage growth, there is still a good chance you will get a significant raise by switching jobs. This reason alone is why many people choose to change companies and careers.
Finally, employers might be reluctant to lay off workers, no matter the recession’s severity. Since the Great Resignation began, employers have struggled to find quality workers. Even if a recession impacts the bottom line, a company might want to avoid laying off workers because finding replacements when the recession ends could be difficult. As a result, they might decide to ride it out and find other ways to cut costs, especially if their new employees are attacking their needs with some renewed sense of passion and vigor.
Drawbacks of quitting during a recession
Of course, there are also good reasons not to quit your job when the economy weakens. First, new hires are typically the first to go. When employers begin to lay off workers, they usually start with new hires and temporary workers. This is because it costs a lot of time and money to get these employees up and running, so employers can save the most money by cutting these jobs first. Unless you offer something hard to replace, the risk is high that you might lose your job just as quickly as you found it.
Another issue that you might encounter is not being able to find a job. While it is relatively easy to find a job now, this might not always be the case. For all the positive macroeconomic data about the job market, none of it helps the individual right who needs a job right now. The recession could quickly escalate, and the next thing you know, no one is hiring. For example, the stock market could have a drastic drop that scares everyone enough to pause for a little and reassess the situation.
Another reasons could be that you find out your new employer isn’t what you thought it would be. Every job comes with its unique challenges. The pay might be better, but the culture is terrible, or maybe because they are having difficulty finding new workers, your job responsibilities are twice what they were at your previous job. While this could happen regardless of a recession, you might find it more difficult to deal with in a new role where your expectations were high.
Finally, while job openings might remain high, employers could scale back salaries to cut costs. A weakening jobs market does tend to bring compensation down with it. If your ultimate goal is higher earnings, you risk switching jobs and not seeing a significant pay increase, if any. For some, a short period of underemployment or quiet quitting could be just what the doctor ordered, less stress and expectations for lower pay could be the thing that frees you up to write the screenplay or learn new skills that could lead to more entrepreneurial endeavors or side hustles.
It is usually not wise to quit working when the economy is in a recession. As much as historians like to find similarities between past recessions, the reality is each one is different. That isn’t to suggest people should never quit their job. The best option is to take some time to understand why you want to change careers and then begin looking around. Ideally, you grind it out with your current job until you get an offer from another employer that actually turns out to be better.
Whatever you choose, it’s important that you feel your savings, 401k and other investments are protected during a down economy. It’s also important that you feel you can liquidate those assets within a few days, as needed. For those reasons, among many others, Q.ai offers Investment Kits and Portfolio Protection, so you can protect your gains and reduce your losses, no matter what industry you invest in.
Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $100 to your account.