HARTFORD, Conn. — Most economists agree that we are heading toward a recession if we’re not there already, and one of the truest hallmarks of a recession is a rise in the unemployment rate.
Right now, it’s at a 50-year low, but there are signs the red-hot labor market is cooling down.
“We're seeing a contraction in the number of available jobs, so, whereas, a while back, it was two jobs open for every available employee. Now, now we're down to 1.67,” said John Caserta, a Chartered Financial Consultant in North Haven.
Are you worried about your job security in the event of a recession? Here’s what Caserta said you need to know:
The newest and oldest employees often get cut first
This is far from a guarantee, but some companies resort to a “Last-In, First-Out” approach, cutting the newest employees, especially if they occupy newly-created positions.
Caserta said we’ve already seen this happen at big companies whose services were more in-demand during the height of the pandemic, like Netflix and Peloton.
However, employees on the other end of the tenure spectrum could be targeted by recessional cutbacks as well, because they make more money.
“Employees that are at towards the latter part of their career, maybe the higher earning employees, a lot of these companies are offering early retirement packages,” Caserta said.
MAKE YOURSELF INVALUABLE
Before we address how you can prepare for a layoff, maybe you can prevent it.
“If you're an employee and you're innovative, you're taking initiative, those things are going to be invaluable to a company, especially during a downturn, so I think being invaluable in your position is really key,” Caserta said.
Of course, how to do that varies from job to job. One thing to consider if you shifted to remote work during the pandemic is the possibility of going back to the office if your boss is pushing for it, Caserta said. It might not be fair, but many employees who are out of sight might be out of mind, and not in a good way.
“I think it's going to be harder to prove that value if you're remote, and you're not seeing as much,” said Caserta.
GET THE EMERGENCY FUND FUNDED
Caserta said your rainy-day fund should be large enough to cover at least three months of expenses, but not larger than a full year of salary.
If you can get to that point, and you still have money left, Caserta said to not be shy about investing money for your future, but to be mindful that not every place you can park your money makes it easy to take it back out for emergencies.
"Certainly, if you have a traditional 401k, you may have some loan options available to you, but it's not that easy to get the money out, so you want to be mindful of that accessibility,” said Caserta, “so using things that are non-retirement based, you might find it easier to access that money.”
Tim Lammers is an anchor at FOX61 News. He can be reached at Tlammers@fox61.com. Follow him on Facebook, Twitter, and Instagram.
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