All the excesses of the past 14 years are colliding into a maelstrom of converging dynamics – the likes of which we have never experienced in such a worrying combination. The US economy is contracting and we’ll soon learn about many major economies following suit. The post-pandemic growth bubble has burst and we must open our eyes to the new reality of our business environment. Anyone who claims they can clearly visualize what the world will look like in a year simply isn’t human. Or isn’t a robot either…
Moreover, 43% of today’s US workforce is Gen-Z and Millennial and only the older Millennials may have some recollection of what it’s like to work in a contracting economy. A good tranche of today’s w0rkforce simply has no idea what’s likely to hit them in the coming months as corporate belts tighten.
My only words of comfort are that recessions rarely last more than a few quarters and we will re-emerge from this – and (hopefully) learn from this.
So how best can we prepare ourselves in the meantime?
Think twice before hopping your job
We are entering a recession and we don’t know how deep/long it will last. 8% inflation doesn’t equate to a 50% payrise, so be wary that you could find yourself in a precarious position with your new employer. The current wage-hike situation is not sustainable, and businesses struggling in a recessionary economy will have no choice but to downside/shed costly staff, and “last-in/first-out” could well apply. We are already seeing many staff seeking to return to their former employers as they quickly discover the shiny new laptop and paycheck didn’t really equate to stability and happiness. There might be a talent shortage, but when businesses struggle, they’ll look to lower their headcounts in any case. Loyalty still means something and many of those who kept the faith will be glad they did so.
Be very careful – many early-stage start-ups will fail
The champagne days of the post-pandemic start-up bubble are over. Savvy start-ups are looking to conserve cash to ride this out and come out the other side. Most mature start-ups have delayed IPO plans. Sure, they all let you work from home, but will they keep you employed in-between Netflix binges? In my view, everyone should experience the start-up thing at some point in their career, but you gotta question the wisdom of doing it right now.
Leaders must get laser-focused in the short-medium term
Spare a thought for the business leaders having to keep the wheels on their businesses with this collision of disruptive forces threatening to derail them. Employees demanding to work from home; salary demands to retain key staff; mental health of staff; cost and scarcity of people with specific skills; fractured supply chains; unscalable automation models; massive challenges to mine and manage data; broken process flows; corporate politics and executing reral change in a remote environment; customers needing immediate help; the impact of war on the European mainland… I can go on and on, but leading people in this quagmire of disruption is a huge challenge. The key is to stay focused, develop short-medium plans to keep the wheels on. Long-term planning is almost impossible amidst such business and economic uncertainty. But you can see ahead a few months to tackle these issues head-on until the fog clears.
Adjust your lifestyle for inflation
This is a huge worry for economies and our living costs, and something not experienced for decades. Inflation is one of the world economic diseases: once it kicks in it’s almost impossible to keep a lid on it, especially with broken supply chains, rising energy costs, rising food costs etc. We have to refocus on how we manage our finances and look at making real changes to our lives to compensate, such as where we live, being astute with our energy consumption, cutting back on overpriced food (learn to cook?), and saving more money for the future as this could get worse – or investing our money in things that hold their value in line with economic fluctuations.
Bottom-line: We must recognize these are highly abnormal times and grind through them.
We’ve got pretty used to tackling uncertainty since March 2020, and one thing is clear today – the only certainty is that these times are uncertain. It’s a shame that we have to face up to a global recession just as we are enjoying seeing colleagues and clients again, but things need to cool off and economies need to return to normal. My hope is that we – as people and workers – become a little bit less selfish, and a little bit more appreciative of working in the technology industry which is essential for the very continuity of business. If everyone’s simply out for themselves, this isn’t going to end well for many people and many organizations. We need to be better collaborators, better empathizers, and better communicators if we are to pull through the next few months and come out the other side on top.