I started my recruiting career at the end of 2004. It was a good time to be a recruiter. The economy was strong. Companies were hiring incessantly, candidates had myriad employment options, and they were undoubtably getting attractive salary increases as they moved from one company to another. The job market was so strong that we were experiencing a war for talent.
Then the Great Rescission happened, and everything changed—in a major way. For those who need a brief refresher: The Great Recession was driven by a housing bubble. America’s home values plummeted by an average of 33%, or $2 trillion. There were record layoffs. Some large companies such as Lehman Brothers completely evaporated. The Dow Jones Industrial Average (DJIA) fell by 777.68 points in one day, a record at that time. Unemployment hit 10%.
Enter 2022. The United States has not seen a true recession since 2008. Oh, the COVID lockdown in 2020? Arguable. This “recession” only lasted for two months and was driven exclusively by a voluntary shutdown of what at the time was an extremely robust economy. After this brief “recession,” unemployment got back down to a historic low of 3.5%, home prices soared more than ever, and the stock market did the same.
But what is happening now? Are we in a recession currently? Are we heading into one later this year? 2023? Like everyone else, I do not have the ability to extract details about the future of the economy from my crystal ball. But having lived through the Great Recession as a recruiter, I find myself preparing for something potentially similar to the ominous dynamic of being a recruiter when there are more companies laying off employees rather than hiring them. I think that both employers and candidates would be wise to do the same.
One way employers and workers can prepare for a tightening of the financial belt while simultaneously experiencing a continued abundance of work is through contract positions. For example, the consulting attorney model is one that continues to gain momentum in the industry, as it offers decision-makers the ability to hire talented employees without increasing headcount, it creates staffing flexibility, and it ultimately results in great cost savings to legal departments. For lawyers, these roles open doors to new opportunities, provide stability, and allow them to put their skills to good use in new ways. While this model is extremely advantageous in a boom economy, it is even more of a secret weapon for both hiring managers and candidates during a slowdown.
In a downturn, employers/hiring managers can use this model to:
For workers who find themselves on the hard end of a downturn, consulting roles offer a light at the end of the tunnel. Consulting roles:
Where the economy goes from here nobody knows. The good news is that there are new and expanding alternatives to standard employment arrangements, and these alternatives have gained—and continue to gain—popularity and acceptance, creating mutually beneficial relationships between employers and employees and opportunities when times get tough.