Yahoo Finance More Than a Third of Gen Z Are Worried About Layoffs: Here’s How They Can Stay Prepared
2022 and 2023 have been years marked by mass layoffs. Companies like Twitter, Zoom and Microsoft have laid people off by the thousands. This has people intensely worried — but none are as worried as Gen Z, according to a recent GOBankingRates survey.
See: Here’s How Much Americans Have in Their Savings Accounts in 2023
The Future of Finances: Gen Z & How They Relate to Money
The survey of 1,002 Americans asked participants how worried they are about being laid off from their current position or about layoffs in general. It found that of those aged 18-24, 26% responded they were “somewhat worried,” and 11.6% responded, “very worried.”
There is clearly a problem, whether one of perception or one that’s more tangible. To understand the situation, I asked the experts for their insights. They also provided tips for how Gen Z can respond to this uncertain and volatile situation.
The Layoff Situation
The COVID-19 pandemic created ripple effects that still impact the economy today. For instance, supply chain disruptions and staffing shortages constrained many businesses. This forced them to make cuts as they slashed their workforces. In the United States, the unemployment rate increased from 3.5% in February 2020 to 14.8% in April 2020.
“A mass exodus from the workplace occurred in the aftermath of the post-COVID shift in employee priorities. Many companies engaged in layoffs, and many employees left for a myriad of reasons,” said Kim Crowder, founder and CEO at Kim Crowder Consulting. “Layoffs are nothing new, but now even more people are finding themselves without a job,” Crowder added.
Today, the double-digit unemployment rate is far behind us: we’re at 3.6% unemployment as of February 2023. However, the result is an increasingly tight labor market. Entry-level jobs are harder to come by, forcing more and more people to compete for a dwindling number of available jobs. This could be a problem for awhile, which is concerning for younger generations that are just starting their careers.
Take Our Poll: Do You Think Bankruptcy Is an Acceptable Way To Escape Student Loan Debt?
Factors Contributing To Gen Z’s Fear of Layoffs
There are many factors contributing to Gen Z’s fear of layoffs, including lack of savings, minimal job experience and lack of job security. Here is how those factors affect Gen Z:
Lack of savings: Gen Z workers are just starting their careers, and many haven’t had time to build their savings. Many may have little or no savings at all in case of a financial emergency like job loss.
Not enough experience: Gen Z is very young, so they haven’t had time to gain the experience some of their older peers have. If they are impacted by layoffs, they worry they may not have the experience needed to reenter the workforce.
Lack of job security: Even if Gen Z workers are employed, they may feel their job is not secure due to the pandemic’s impact on their industry. They may be concerned that their employer will lay people off or that their job may become redundant as the company adapts to the changing business landscape.
These factors coupled with ongoing economic uncertainty mean that Gen Z continues to be concerned about the prospect of layoffs. In many ways, Gen Z is at a bigger disadvantage than other generations.
Impact of Layoffs on Gen Z
We know that the labor market is tight right now and that an increasing number of people are competing for fewer jobs. Gen Z, in particular, has been especially worried about the labor market. Many of these individuals have struggled to find a job, and the job market has become increasingly competitive. Add mass layoffs to the mix, and it’s easy to see why Gen Z is concerned. But the layoffs are generally beyond Gen Z’s control. “Most are due to changes in companies’ infrastructure and budget constraints,” Crowder said. However, that hasn’t quelled Gen Z’s concerns about layoffs.
“Gen Z, who have only recently begun to enter the workforce, are doing so in an absolutely unprecedented socioeconomic context,” said Cody Harker, head of data and insights at Bayard Advertising, a full-service recruitment advertising agency. “The very oldest members of this cohort became adults just a few years before the onset of a global pandemic, rampant inflation, fears of recession, developing international conflict and ongoing concern around climate change.”
The pandemic has created an uncertain job market impacting Gen Z more than any other generation. With Gen Z just starting their careers, the labor market may have a significant impact on their job prospects and their mental health as well. As a result, Gen Z must take steps to stay prepared during uncertain times.
How Gen Z Can Stay Prepared
During these unprecedented times, Gen Z must stay ahead of the curve. That could mean honing their skills, working multiple jobs or starting a business. These steps can help Gen Z be proactive rather than reactive.
“Stay ready so you don’t have to get ready. Stay ready to move on to your next job by consistently updating your resume and collecting recommendations often, when you are thinking of leaving or when layoffs are looming,” Crowder said. In other words, Gen Z must be agile and adaptable.
In many cases, Gen Z is already filling this mold, Harker says. “For one thing, job-switching among Gen Z workers has increased by 134% since the start of the pandemic.” This shows us that Gen Z is already the most mobile generation and is highly willing to move from one job to another. They also have multiple jobs, according to Harker. “25% of Gen Z workers are also working multiple jobs (compared to the 16% average across age groups).”
Another possibility for Gen Z is to start their own businesses. While these younger workers may not have much capital, what they do have is the energy it takes to start a business. “Finally, about two-thirds have started (or have plans to start) their own businesses — and nearly half of those have numerous side hustles.”
Bottom Line
Gen Z faces an unprecedented economic climate marked by mass layoffs and a tight labor market. As a result, more than one-third of Gen Z is at least somewhat worried about layoffs. Their lack of experience, minimal savings and lack of job security make the current labor market particularly worrisome. However, Gen Z can address the situation head-on by updating their resumes, being more adaptable and having an entrepreneurial spirit. By addressing challenges head-on, Gen Z can build a strong foundation for a successful career and overcome their fear of layoffs.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: More Than a Third of Gen Z Are Worried About Layoffs: Here’s How They Can Stay Prepared
