The recession has caused fundamental changes in the way Employers look at their employees, and how employees are responding. Employers have had to make difficult staffing decisions at every level of their organizations. The reality in many cases what that expenses had to be cut, or the business would be in jeopardy. It's no surprise that the expense of labor is significant and laying an employee off has immediate cost cutting benefits.
Furloughs, cutbacks in hours/days per week and pay (also benefit) reductions became methods with which employers were able to keep some employees, but at lower take home pay for the employee. While this is understandable, and for some preferable to losing their job altogether, the result is the same . . . employees no longer relying on one employer. Employees have to find supplemental income to maintain their income levels. Trimming the pay might keep the employers' doors open, but the cost to employees is high.
Many employees are looking for "second job" options. The ability to work remotely has helped move that trend forward and it's not going to stop. Employees will work second "retail" jobs, freelance, or start a company, in order to make ends meet . . . at least in the short term. They don't want to be in a position of being vulnerable to one employer's decision about their employment. Those with more experience, might very well decide to start a business of their own.
Entrepreneurship has never been stronger. According to BusinessWeek quoting the Kaufmann Foundation:
"A crop of potentially groundbreaking companies is emerging from the wreckage of the Great Recession. No question, some will blow up, and others will fail to reach their potential. But the downturn has done little to dampen the entrepreneurial spirit. During the first half of this year (2009), angel investors financed 24,500 new ventures, 6% more than during the same period last year, according to the Center for Venture Research. The overall amount of money going into startups has declined, but the figures suggest that this year will see the birth of roughly 50,000 companies with enough promise that someone is betting money on them. "It may be that this is the best time to start a company," says Carl Schramm, president of the Kauffman Foundation, an organization that promotes entrepreneurship."
There's another study conducted by the Small Business Administration (SBA) “Nonemployer Startup Puzzle” that came out in December 2009. It concludes there is "a correlation between job losses and startups of single-person businesses (called “nonemployer businesses”). “Nonemployer start-ups follow and are heavily affected by a state’s unemployment rate.” In other words, there are more startups when unemployment is high."
My point is the workplace has changed, and will continue to change. Employees who are not continuously working to improve their skills will become obsolete. The onslaught of information and the way it's being delivered has never been more overwhelming. It's essential for employees to stay alert to new thinking, new technologies and better ways of doing things. They need to work to be top performers and indispensable to their employers. (See Are You Indispensable Or Vulnerable)
