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Recession Vs. The Great Resignation: White Gloves, Not Boxing Gloves, Recommended

Two male hands in boxing gloves clashing against each other as flames explode from them.

Inflation versus The Great Resignation looked like a boxing match with no sure winner. After all, unemployment was — and still officially is at time of writing — at 3.6 percent, a point short of the half-century low we saw in 2020. The turmoil the pandemic caused to people’s lives turned the phenomenon of “job hopping” into “The Great Resignation”/”Great Reshuffle” in a way nobody had expected, with a powerful effect on hiring teams the world over.

The result was a demand for flexibility from employees only too willing to move on to — what they perceived as — greener pastures if more flexibility wasn’t forthcoming, leading to exacerbated retention issues across industries. Reality switched from a world in which employers demanded flexibility of their employees and potential employees to one in which employees demanded it of their employers and potential employers.

Round 1 – Bullying and Backlash

Wishing it away didn’t work, although many tried. Why is anybody’s guess. Productivity and profits surged during lockdown; and, although there is more than one reason for this, remote work proved itself, kept costs low, kept quality up, and helped those profits surge. Attempts to instate “back-to-office” policies failed and were adapted or rescinded across some major companies. The reaction for Apple was seismic. Over 1,000 employees, current and former, signed an open letter, part of which said:

“Stop treating us like school kids who need to be told when to be where and what homework to do.”

The company also lost a highly valued director in its machine learning division, Ian Goodfellow, to Google, specifically due to its back-to-office mandate. (KO in favor of Google on that one.) Having a black eye and egg on one’s face at the same time isn’t a good look, which may have been on Elon Musk’s mind when his return-to-office demand contained the caveat:

“If there are particularly exceptional contributors for whom [remote work] is impossible, I will review and approve those exceptions directly.”

Welcome back, non-exceptional people! Don’t forget we’re a family with a thriving company culture! Yay! High-five, anyone?

While Musk continues to straddle the two worlds of tech industry genius and luddite, Apple backed off, citing (awkwardly clears throat) COVID. Many big players in the financial industry also tried the hard-line, boxing gloves on approach, and came away with a black eye. However, COVID itself may be more than an excuse for those demanding remote work rights. If variants keep coming and everything keeps changing, stability of some sort is required — not just for quality of life or health, but also for business as usual — at least in terms of productivity and results.

All of which makes employees appear far more business-savvy than many “leaders” running businesses – and seemingly in circles – today.

Points to the employees, then.

Round 2 – Clashing With Chaos


Inflation v. The Great Resignation didn’t get past the weigh in, image wise. Asking employees to start forking out hard cash just to sit in the office all day, when their money is worth much less than it was pre-COVID, appeared to be the perfect ingredient in a perfect storm, making The Great Resignation potentially worse for bosses attempting to punch below a tightened belt.

Counters with uppercut. Ouch.

And it didn’t help that the the tech industry lost $1 trillion over 3 days of trading. News of layoffs, lots of layoffs, soon followed. Then the rescinding of job offers, demonstrating objectively that the industry was turning on a dime in response to the downturn. Suddenly, the tech industry and other industries existed like night and day, only side-by-side, one stomping on hiring strategies and burning offers, the other bending over backwards to get new people in.

Has anybody not placed a bet yet?

As inflation became slowly worse, the new phenomenon of rescinded job offers started spreading to other industries, such as retail marketing, insurance and consulting. Storm clouds were closing in and the word “recession” was on everybody’s lips, with some predicting a close call by the end of 2022, others a “mild” recession early in 2023, and some, like Jeremy Grantham, warning that the BIG POP is coming and $45 trillion of assets in the US alone will be wiped out.

Still, Ali did beat Foreman in ‘74, so why worry?

However, geniuses who are never wrong — like Jeremy ‘Debbie Downer’ Grantham — aside, there are those who believe the lessons of history can help us understand what level of recession we’re heading into – if we’re not there already, of course. (Shhh.)

Bubble bursts like the financial crisis of 2007-2008 and the dot-com disaster of 2000-2001 were both credit-driven — debt-related excesses in their relative infrastructures built up until bursting point, giving us around a decade of economic woes. Recession based on inflation has historically inflicted less damage to corporate earnings, which should make a big difference to investors.

Many industries remain strong and should be able to go the distance.

In a mild recession, there is no sure bet that employers will suddenly gain the upper hand, at least not to the point of putting on boxing gloves and snarling orders at employees to return to the office or else. The best strategy is a white gloves approach. Flexibility should be considered here to stay, at least among those who wish to remain competitive and heal any hiring and retention issues.

Once people have been given something, it’s hard to take it back.

That’s human nature and it shouldn’t be underestimated. And that’s without even broaching the subject of company culture or morale among teams. Loyalty gives great ROI if you know how to inspire it. March was the 10th consecutive month that resignations passed the 4 million mark, so there are lots of companies out there who have absolutely no idea how to do that.

And they’ll pull on the boxing gloves once the recession becomes official.

Round 3 – Keeping Your Balance


The Great Reshuffle was named when it became apparent that people quitting their jobs were not moving out of the labor force, but into other occupations. It’s a good phrase to describe a sense of balance — although not much relief for companies who were left and found it difficult to attract new talent.

But who’s to blame for that? The Great Reshuffle was really all about talent leaving to go to companies who offered more flexibility, a better work-life balance, greater respect, a chance for an enhanced sense of team morale and personal work satisfaction.

To companies losing out it was more like the Ali shuffle. Still, thinking hard about using agility and coordination to beat your competition isn’t a bad thing. Especially for those who’ve made mistakes in the past. Investing in long-term retention, rather than hoping people will feel trapped into staying, will pay back on the investment many times over for any business — just as those who crack the whip will eventually pay for it.

Besides, whips don’t fit in a boxing metaphor.

Any recession will bring a rebalancing of power, of course.

Those who think this gives them the upper hand — revenge against selfish employees who wanted a life of their own — and turn it into a fist, will be at a serious disadvantage to those who don’t. Demanding that people return to the office at their own increasingly high expense, while saying “Not you, buddy” to those being laid off, will bring only more negative surprises the “experts” didn’t see coming. Still, your own business fitness, your own expertise, and your finely-tuned strategies are yours to apply as you wish.

In the end, it all depends on who you have in your corner.

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Inflation Nation: Preparing for the Big Pop?

Man in suit holding needle over yellow balloon, a moment before bubble burst. Isolated on white.

The good news is that the labor market remains strong, with companies across most industries focused on solving the hiring/retention issue and finding real talent to fill seats and bring their expertise to the table. However, the tech downturn that came after Big Tech lost over $1 trillion in value over three trading sessions and stuck out like a sore thumb, now appears to be spreading to other industries as inflation hits and The Great Resignation refuses to quit.

Big Tech as Influencer?

To say that what is happening right now is unusual is a major understatement. From tech companies being driven, pushed, and cheered on toward rapid growth, to stopping in its tracks and becoming focused on staying resilient during an economic upheaval, the industry has moved from hyper-evolution to high-alert survival status.

Those storm clouds are now moving across other industries, including retail marketing, insurance and consulting. Recruiting services are also, obviously, withdrawing offers. Real estate brokerage Redfin Corp has rescinded job offers in recent weeks. Despite this, the labor market remains strong. Unemployment stills stands near the half-century low it reached in 2020 at 3.6 percent.

Do these companies know something we don’t?

Well, we all know about inflation. We know we’re living in an incredibly unstable time, which means the bottom line is business forecasting. The experts relied on to make informed predictions about future economic scenarios, upon which decisions can be made, cannot pretend to have any great confidence in things going one way or the other.

Or to what degree.

Trying to predict the next 12 months from an economic standpoint isn’t possible; at least, not with any degree of confidence. The most worrying part — possibly — of rescinded job offers is that they show us clearly that businesses are quickly undoing decisions made only weeks before, as if a panic button was pressed that instantly changed everything.

This shocking turnaround is, unfortunately, an objectively conservative action: batten down the hatches to maximize durability against a potentially devastating storm. An old story of survival.  The irony is that, although this wave appears to be growing larger and building beyond the tech industry, most employers across most industries still can’t find enough workers.

The competition for talent is actually growing, according to Gartner. Voluntary turnover is set to rise almost 20 percent by the end of 2022 to a massive 37.4 million. While tech and other companies batten down the hatches as a survival strategy, The Great Resignation itself is holding its position at a steady pace.

In fact, Gartner is still helping businesses by recommending optimized strategies, such as:

  • Signing bonuses – address key talent gaps
  • High-level benefits – including retention bonuses
  • Decouple pay/location – optimize hybrid/remote by decoupling pay and location

It does feel strange, of course, to so easily step between two different worlds that exist in the same period of time, as if moving easily into an alternative universe, then stepping back. But here and there is where we are. Whether job seekers are able to position themselves in the right one is a question for them to answer — so far, from a big picture perspective — the odds are massively in their favor. 

The question of whether one will come to dominate the other remains to be seen. It’s all a matter of time.

Speaking of which…

Recession and the Four-Day Week

“Time and money” is a phrase we all know. And time always comes first. Internationally, 4-day week experiments are taking place right now, with a view to changing the way we live and work forever. The US trial started on April 1 and is set to last six months. Whether that date indicates it will turn into one big joke also remains to be seen.

How inflation will impact and spread the “batton down the hatches” mentality across industries is something to watch for. The question of how it will effect the idea of the 4-day week (on full pay), is also interesting. Perhaps most interesting is how inflation will impact The Great Resignation as more companies demand that workers return to the office.

It does seem like the key ingredient in a perfect storm.

Now may be the perfect time to offer time to employees, from a competitive viewpoint. The more flexibility the better. Once people have been given something and get used to it, taking it away can cause problems. 

Amazon announced its intent to “return to an office-centric culture as our baseline” to its corporate employees on March 31st. By June 10th, it had backtracked the decision, with corporate workers no longer required to return to the office even three days a week.

Things are changing quickly in confusing ways.

Elon Musk – certainly not recognized publicly as a Luddite – is demanding workers return to the office 40-hours per week. Only “high-power employees” should be allowed the luxury of working remote, apparently. This comes as inflation soars and may be seen as a major slap in the face to employees. It also raises the question:

“Are you sure technology can drive our cars for us when it can’t even facilitate optimized human communication?” Ironically, some are predicting that Elon’s “back-to-office” order will be a train wreck.

Head of remote for Cimpress and Vista, Paul McKinlay, told Fortune that Musk was “on the wrong side of history” and predicted a mass resignation of employees at Tesla. Given inflation and all the uncertainty in today’s world, it’s understandable that some see the move as unnecessarily harsh and willfully tone deaf.

It’s All Coming to a Head – But Whose Head?

In general, it’s likely that belts will continue to tighten and freezes on hiring will continue to happen. If caught by surprise, to whatever degree, as with the tech industry recently, rescinded job offers may continue to spread. That must include any potentially vulnerable industry:

Retail, Restaurants and Bars, Leisure and Hospitality, Automotive, Oil and Gas, Sports, Real Estate, etc., could all be planning a defensive position against an upcoming recession.

In such a scenario, increased hiring may come to the Healthcare industry, Utility Workers, Accountants, Credit and Debt Management Counselors, Public Safety Workers, Federal Government Employees, Teachers and College Professors, Delivery and Courier Services, Pharmacists and Technicians, Public Transportation, Lawyers and Legal Professionals.

The usual suspects in the recession-proof stakes also include: 

Consumer Staples – people need certain items in their homes and will always prioritize them. Toothpaste, soap, shampoo, laundry detergent, dish soap, toilet paper, paper towels. Specific things are always in demand. And so to:

Grocery & Consumer Goods – Grocery and consumer goods/ discount retails always tend to do well in recessions, although they are not necessarily bullet-proof, especially if shortages happen and alternatives spring up; online, for example.

Alcoholic Beverage Manufacturing – the higher end of the market may suffer in a recession, but the cheaper end tends to do well when people are worried.

4. Cosmetics – these always do well and tend not to be affected by recessions: Keeping up appearances.

5. Death and Funeral Services – doesn’t change; may get busier.

Still, because competition for talent dwindles during a downturn or recession, there is less threat to the key talent companies need to keep. That talent sees what’s going on out there and is content to stick around – although the phenomenon of The Great Resignation no longer makes even that a sure bet.

Top investor Jeremy Grantham – who correctly predicted the 2000 dot-com bubble, the 2007 housing bubble, and even the 1989-1992 Japanese asset bubble – is now warning of a “super bubble” in US markets.

Grantham believes the BIG POP will wipe out over $45 trillion of assets in the US alone. He has been talking this way for over a year now, publishing serious warnings along the way, and believes we are now standing on the precipice.

Graham believes this, as an upcoming event, has moved from a possibility to a probability – leaning toward certainty.

Still, the law of averages say he’s got to be wrong sometime, right?

Either way, Ladders doesn’t provide financial advice, so put whatever you read into whatever context you can through your own efforts, get advice from professionals in the field, and step carefully.

Strange days indeed as a famous New Yorker once said.