Tuesday, November 18, 2008

Job Security and Young Professionals: Staying Smart During an Economic Downturn

Millenials, persons born between those of Generation X and those of Generation Y, are starting to trickle out of the university arena and into the workforce. Unfortunately for this demographic, which amounts to about 76 million adults, today’s work force is currently bearing the brunt of an economic crisis. According to a survey by Accenture Limited, 46% of U.S. middle managers said that, because of the current state of the economy, “switching employers in the current environment is risky.” Figures such as these have begun to reach the ears of millenials, causing many of them to become reluctant to change job positions.

According to David Smith, the managing director of talent and organization performance at Accenture, a global consulting company, “It’s unclear whether a different employer will be able to provide sufficient job security, training, advancement opportunities, and other benefits” given the current economic climate. Young professionals who know that lay-offs often abide by a “last in, first out” policy and have become less inclined to seek new positions.

If you are a young professional considering joining a new company or firm, there are a number of ways in which you can guard yourself against less than lucrative job opportunities. Following the steps below may help you face career transitions proactively.

1. Ask questions. When you receive a job offer from a prospective employer, make sure that you employ the interrogation method. Some examples of questions that you may want to consider asking include: 1) How is your company’s turnover rate?, and 2) What criteria do you use when making layoffs?

2. Do research. While you may ask questions of your prospective employer, there is some information that may be omitted via direct questioning. As such, you may benefit from researching articles on the Web or in newspapers that may shed light on the company’s financial history. Public companies are required to make their 10-L filings, documents that offer figures on the performance of a company, publicly available. These filings can be found with the Securities and Exchange Commission.

3. Start saving. Because of the precarious state of the economy and the workforce, it is imperative that you start safeguarding your finances as soon as possible. In the event that you find your job transition is not running as smoothly as you wished, it helps to have some money saved up that you can rely on. For tips on saving and investing, browse through WISER's "Saving & Money Management Basics" fact sheets.

Professional millenials, in the infancy of their careers, should carefully weigh the pros and cons of job transitions during the current economic crisis. If you do decide to accept a position with a new employer, adhering to the steps above may help you make the smartest maneuver possible.

2 comments:

Amrapali said...

Good post. The tip about saving is very good. It is a good idea to set up an emergency fund which has money worth at least 2 months of your salary. This will help you be financially stable even in a difficult situation.

brettsd said...

I think that while you have correctly identified the need for young professionals and members of the Millennial generation to be cautious during this time period, I believe that this downturn provides an incredible opportunity for this generation. With every other generation losing a large chunk of their investments and savings in the recent economic downturn, the only generation who had very little to lose was Gen Y. It is important that Gen Yers save now, but also to make sure that they do not ‘batten down the hatches’ too tightly less they miss the incredible opportunity once the economy turns around to buy assets relatively cheaply.

Up until the middle of this year, young professionals could not keep up with the price inflation in many cities and markets. Now, with prices falling so dramatically this generation has a chance to fulfill their more long term dreams of things like home ownership without overpaying for them. The recession will definitely cause some near term pain, but I believe because of their generation’s adaptability and flexibility, they will come into the next economic expansion the least hurt by the recession. Also employers may be even more willing to hire this generation because they are cheaper than more experienced workers.