(Bloomberg) -- Even though the unemployment rate in the US is at a 53-year low, many workers are still preparing for layoffs as a matter of when, not if.
A growing number of employees are making sure they have a plan B — or C — to fall back on in the face of mounting job cuts and pessimistic outlooks across industries. That might look like trying to save a little extra money each month, taking on a side hustle that could become a full-time job or being more open to switching career paths if necessary.
“People are looking at futureproofing their career,” said Robert Boersma, the vice president of operations, North America at the job-search platform Talent.com.
Boersma said that growing access to the gig economy through app-based work is a key driver of these habits, as is high inflation and everyday expenses. “A really high number of people say, ‘Well, I see the headlines. I feel uncertain about that.’”
Tens of thousands of job cuts have been announced in industries ranging from tech to publishing to finance, and Google searches for layoffs have spiked in recent months. One in five employers said they expect their workforce to shrink in the next three months, a January survey by the National Association for Business Economics found.
The layoffs reinforce a common feeling: Some 70% of US workers said they would be worried about job security during the next recession, according to a November survey from Insight Global. In separate research from Talent.com, 45% of respondents said they were likely to take on a side hustle during a time of economic uncertainty.
Preparing for layoffs
Phoebe Gavin, a career and leadership coach in New York City, didn’t wait for uncertainty.
“I’ve been preparing to get laid off ever since I took this job,” she wrote in a Twitter thread when she was laid off from Vox Media in January. As a two-time veteran of job cuts in previous roles, Gavin had spent the better part of the past decade building her savings and launched a part-time career-coaching business in 2019.
“It’s a three-legged stool,” Gavin said in an interview. “It’s the financial piece, but it’s also your network and building out your skills.”
In the same thread, she announced that she would be focusing on her coaching business full time.
The aftershocks of a layoff can linger for up to a decade, making workers less trusting that their next job will last and more likely to doomsday prep, said Denise Rousseau, a professor of organizational behavior at Carnegie Mellon University. Before the pandemic, around four in 10 workers had experienced a layoff or other form of job loss at least once.
Yet building a financial cushion is easier for some workers than others. An estimated 64% of Americans were living paycheck to paycheck at the end of 2022, some 3 percentage points more than the year prior. Wages haven’t kept up with inflation, and higher costs for everything from rent to eggs have squeezed consumers’ budgets.
As a result, workers are exploring alternate pathways. The Talent.com survey found that 24% of workers said they would definitely switch industries if they needed to, and 39% said they would probably do so.
Jessica Hetterich, a front-desk manager for a salon in Nashville, Tennessee, was tired of feeling anxious. She was first laid off six months after joining the workforce in 2010, and again two years later. While she applied for tech roles in 2021, Hetterich ultimately opted out of office-based work altogether, a decision she’s more confident of with every headline she sees about job cuts.
She’s also worked on building savings and enrolled in marketplace insurance that wasn’t tied to her job.
“I had that realization that I’m just a number on the page and I have to look out for myself,” Hetterich said. “I was always taught: Work hard, please your boss and be loyal to the company and you’ll be rewarded. And that’s not necessarily how it always goes.”
©2023 Bloomberg L.P.