Should employers look at alternatives to layoffs and furloughs, such as incentives for voluntary separation?
A little over two in five (41 per cent) of workers in the U.S. believe that the country is already in recession, finds The Conference Board.
On the other hand, 33 per cent believe we will be in a recession within six months.
And many employers are already implementing cost-reduction measures, finds the survey of more than 1,000 individuals conducted from July 29 to Aug. 4, 2022. Employees say their employers have:
- restricted hiring to crucial roles (36 per cent)
- frozen all hiring (22 per cent)
- implemented a major restructuring of the organization (19 per cent)
- deferred pay increases or bonuses (15 per cent)
- cut bonuses (14 per cent)
- conducted layoffs (13 per cent)
- implemented furloughs with benefits (four per cent)
In the current economic climate, far fewer employers are planning to boost staff in the second half of 2022, according to a previous report.
"Amid historically low unemployment in the U.S., this recession will be significantly different from prior downturns," says Rebecca Ray, executive vice president of human capital at The Conference Board.
"Businesses should be mindful of the lessons learned from the COVID recession, when those that furloughed or laid off workers saw just how hard it can be to get that talent back. As we face another recession — which The Conference Board projects will begin later this year — leaders should explore alternatives to layoffs and furloughs, such as offering incentives for voluntary separation."
Despite these cost-cutting measures, 36 per cent of workers feel very secure and 44 per cent feel secure in their jobs.
Workers’ biggest worry is a decline in the stock market (60 er cent), according to the study.
This is ahead of job loss (42 per cent), delayed retirement plans (31 per cent), falling home values (27 per cent) and loss of health benefits (14 per cent).
More than nine in 10 (91 per cent) say they have the financial resources to withstand a slowdown of six months or less, and 75 per cent say they could endure a recession of more than half a year.
But different generations have differing worries.
Millennials (64 per cent) fear job loss at a much higher rate than gen X (46 per cent) workers and baby boomers (26 per cent). Meanwhile, baby boomers (71 per cent) fear a decline in the stock market at a much higher rate than their generational counterparts (59 per cent among ben X and 43 per cent among millennials 43 per cent).
"As baby boomers near retirement, they are keeping a close eye on the stock market and their [retirement plans]. Millennials, on the other hand, are earlier in career and thus less established, and understandably fear job loss more,” says Robin Erickson, vice president of human capital at The Conference Board.
More than half (54 per cent) of those aged 55 and older now say they are delaying retirement because of the increased costs, according to a separate report.
Here are four things organizations can do today to help employees manage the impact of inflation, according to BenefitsPRO:
- Help workers with student loan repayment.
- Offer financial coaching and planning.
- Try auto-enrollment and employer matches in retirement plans.