How will the recession affect types of employment?
With an imminent recession, there are nationwide fears of job losses and unemployment. However, despite a massive labor shortage affecting the entire country, unemployment is at one of the lowest rates in history, at around 3.5%. This is quite uncharacteristic for a recession. Severe economic downturns usually result in mass layoffs as organizations scramble to save pennies and stay afloat.
Of course, the high employment statistics don't necessarily mean the working landscape won't change at all as employers tighten their belts. The likelihood is that, as Forbes explains, we'll simply see unpredicted adaptations. What will these look like? Let's find out:
Meteoric rise of contract work
Freelance, part-time and independent contract employment have steadily gained popularity over the past few years, as the Financial Times explains. Full-time, permanent jobs are losing favor to what's been coined the "gig economy." In fact, there were over 55 million American gig workers in September 2022. And, while this is largely an employee preference, it's also economically sustainable for employers, particularly when money is tight. Typically, independent contractors and other non-permanent workers aren't formally classified as employees, which means organizations don't have to provide the same benefits.
It's a "win some, lose some" arrangement for workers in some regards, but from a company management perspective, there are no losses. Businesses don't need to cover health insurance, subsidized child care, transport stipends or any other benefits that contribute heavily to overhead expenses. They also tend to require non-permanent workers to use their own equipment such as laptops. Consequently, we can expect to see a rise in businesses hiring temporary workers rather than new permanent employees.
Work from home reigns supreme
Although COVID-19 pandemic stay-at-home orders have been lifted for the most part, many employees are still working remotely, at least some of the time. While some employers argue that remote workers aren't as productive as those who come into the office, others have seen numerous benefits spring from even partial home-based work.
First and foremost — and of particular importance here — is that remote work helps organizations save money. With workers coming into the office on alternating days (if at all), businesses needn't spend thousands of dollars (if not tens of thousands) hiring expansive work spaces each month. Many companies downsized their physical sites during the height of the pandemic out of necessity, but have since stuck with their new, smaller premises. Modest properties also mean lower utility bills.
Further, while it may seem like a minor consideration, organizations whose workforce don't work from the office every day don't have to spend as much of their capital on office resources such as stationery, IT equipment (like second display monitors or giant servers) and furniture. These costs add up quickly, so more organizations are likely to keep pursuing (or start implementing) remote or hybrid working models.