Is my job safe during a recession? Will businesses continue to hire if the markets crash? Is this a good or bad time to switch jobs?
At Lancor, we are consistently asked by both the P.E. firms that we work with, and the executives we place, about where we see things headed. Currently, most executives are concerned that hiring freezes, layoffs, and job insecurity will inevitably go hand-in-hand with a recession. While unfortunately these recession job scenarios are possibilities as outlined below, overall I see a more optimistic picture.
THE BAD NEWS: What happens during a booming economy is that everyone looks good and the fallout from bad management is often less noticeable. If the firm or business is succeeding financially, it can be unclear where the cracks are in a company’s foundation. When the economy is contracting, however, businesses cannot afford to hang on to those in leadership positions that are not performing. The truth is workers who are not pulling their weight will have to worry.
THE GOOD NEWS: While many are concerned that it is challenging to find a new job in a recession, we are seeing just the opposite for top workers. When the world is facing difficult economic and political times, companies need strong and capable leadership more than ever. If you are a strategic and innovative executive in private equity you are going to actually be in even more demand in the coming months.
So how do you make it clear to a company that you are a strong leader? It is crucial to demonstrate that you have created value at your previous positions. Give examples of taking initiative, starting new ventures, or making and saving money. If you have been able to successfully navigate a company through a previous struggle or downturn, there is tremendous value in that as well.
THE OPPORTUNITIES: Joining a firm during a downturn when compensation and bonus offers might be lower, is also an opportunity to ask for equity in a firm. It is a chance for wealth creation as ideally the market goes up over the long term – especially with top talent at the helm. I have seen many workers negotiate for equity–with that move paying off in multiples.
ADDING INCOME: For those of you who want to minimize the risk of joining a new firm during turbulent times, taking an independent board member role of a P.E.-backed asset is a smart option as it allows you to keep your job. A board role offers an opportunity to make additional income, deepen your rolodex of PE firms and test the specific style of a sponsor without losing your steady paycheck or current position.
I try to see challenges as opportunities. The next few years will definitely present some incredible long-term opportunities for those who are looking for them.