This post was last updated on April 11, 2023
Have you heard the word “recession” thrown around a lot lately?
Does it stress you out?
Do you wonder what it might mean for your job, the side business you want to start, or the promotion or raise you’re after?
I feel ya, and this is why I chose to research this topic and to gather trusted information on what we’re really looking at here, and how a recession might affect our work, our income, our goals, and our dreams.
Recession is a BIG topic, and there are many moving parts that come into play. So much so that no one can really ever predict with certainty what the economic future will hold. Regardless, there are a lot of smart people making educated guesses, and listening to them is pretty much the best we can do.
In this article, I’m going to go over:
- What exactly IS a recession?
- How likely is it that a recession will happen?
- Is unemployment likely to become a big problem again, like it was during the height of COVID?
- Will finding work become harder? If so, how much harder?
- What industries are likely to suffer the most and how much?
- What industries are the least likely to suffer, if at all?
- Can you start a business during a recession?
- Can you still ask for a raise or a promotion during a recession?
- Can you make a career change during a recession, or is it best to just wait it out?
- What will help in terms of mindset when it comes to building our dream career, amidst the realities of a recession?
What is a recession?
The primary measurement countries use to track the state of their economy is Gross Domestic Product (GDP). (Google that if you want to understand more about what GDP is, as I’m not going to get into it here.) For now, all you need to know is that when GDP is growing, the economy is considered to be all good. As soon as growth stops and/or declines for a length of 6 months or more, a country is considered to be in a recession.
Recessions are typically marked by an increase in unemployment and job loss. That’s what makes so many people nervous about recessions, but interestingly enough, the predictions for our upcoming, potential recession look a little more promising.
How likely is a recession to happen?
The most common prediction when I first wrote this article was that we were likely to hit a recession in the first quarter of 2023 (January – March). However, it is now April as I update this article, and we are not yet in a recession.
Most economists, such as those surveyed by the Canadian government, Deloitte and the Royal Bank of Canada, still predict an upcoming recession in the 2nd and 3rd quarter of this year. However, all seem to be in agreeance with the statement from Deloitte that it will be “mild and short-lived.”
Is unemployment going to become a big problem again, like it was during the height of COVID?
In Canada, the unemployment rate is expected to grow to approximately 6.3% (source: Gov’t of Canada) to 6.8% (source: Royal Bank of Canada) by the end of 2023, and that number is 4.6% in the US.
But get this: all of these numbers still fall in the healthy range of unemployment, which is considered to be anywhere from 4-7%. (We wouldn’t want it to be lower than 4% because that’s when businesses struggle to find people to hire!)
So yes, work will continue to be available. In fact, the Bank of Canada’s most recent business outlook survey found that most businesses have no plans to slow down hiring, despite knowing the likelihood of an upcoming recession.
If we do enter a recession, will finding work become harder? If so, how hard will it become?
Job search times might become longer, yes. So keep this in mind if you’re looking for new work now, or in the near future. Also, consider taking an added pause before quitting your job without first having another one lined up. (Something that is worth considering regardless of a potential recession, and will depend upon your level of risk-tolerance and burnout.)
However, if unemployment in Canada rises to just 6.5ish%, as predicted (a rate that is much lower than previous recessions, and nearly HALF of what it was during peak COVID**) the job market is likely to remain relatively healthy. This means work will remain available, pivots will be possible, and while we might (maybe?!) have to slow down in some ways, or adapt in other ways, it’s not looking like our dreams will need to be put on hold.
Phew, right?!
What industries are likely to suffer the most, and how much?
Not all industries are created equal. So let’s look a little closer.
Now, you may be familiar with the fact that I don’t love job postings. There are many reasons for this (a topic for another time). However, job postings are incredibly helpful when it comes to analyzing job market trends.
According to stats from the job site Indeed, the tech, manufacturing, and construction industries have historically been shown to be the most vulnerable to a recession. However, while these industries have certainly cooled off in Canada over the past few months, job postings continue to remain incredibly high compared to pre-pandemic levels.
What industries are most likely to do the best if we go into a recession?
Other industry-specific predictions for a recession in Canada? (Sorry to my peeps from other countries, I didn’t have time to research all the places!)
Economists at RBC predict that travel and hospitality are likely to remain strong, unlike during COVID, due to all the post-COVID travel fun bugs most of us have! Public service jobs like healthcare workers, teachers, civil servants, etc. are unlikely to be affected. And while likely to be impacted, of course, service-based jobs are likely to remain fairly strong during a recession as well, as has been the case in previous recessions.
And fun fact – scientific, technical, and professional service jobs have seen the LARGEST amount of employment growth since pre-pandemic. These jobs are also the safest when it comes to things like automation and AI replacing jobs, too!
The overall consensus seems to be that while times might be harder than the past 6 months, it’s not looking disastrous, and overall, we are much better poised and likely to fare better than previous recessions. That’s great news!
Can you start a business during a recession?
We can still start a business, even if we have to research a bit more to figure out if our business idea still makes sense during a recession. People are less likely to spend money on goods and services that aren’t necessities, and more likely to spend money on ones that are. Also, doing market research and testing to make sure our business messaging is matching the demands of our target market will be more important than ever. But arguably, according to Professor of Entrepreneurship and Business Strategy at Toronto University, Dave Valliere, as long as we keep these things in mind, there’s never a bad time to start a business!
Can you ask for a raise during a recession?
More good news: we can still ask for a raise, even if it might be harder to get a yes. As long as you can show to your employer the added value that you’re adding in terms of time or dollars saved or new responsibilities you’ve taken on, you are in the right to ask for a raise. And so you SHOULD ask for a raise!
Can you make a career change during a recession?
It can be easy to assume we need to stay put and not make a change when words like “recession” or “economic downturn” or, as we are all familiar with, “pandemic”, are being thrown around. However, there are always opportunities available, jobs on the market, and people who are hiring… even in the worst of economic times.
So while, like at any time, I would recommend waiting until you have a new job lined up before leaving your current one, there is no reason to NOT go for the change you want to make during a recession — or any time, really.
Be aware of, and honest with yourself, however, the fact that the word “recession” might be acting as an excuse to stay exactly where you are and to hold back on making the kind of career change you desire.
What will help in terms of mindset when it comes to building our dream career, amidst the realities of a recession?
Remember that anything is possible at any time. Let’s imagine that unemployment suddenly became way higher than even during the peak of COVID-19 (which hit a record for Canada of 13.7% in 2020)… there would still be opportunities. The majority of people would still be employed, there would still be people leaving jobs, new jobs becoming available, and opportunities to start a new business.
The kinds of opportunities, the amount of opportunities, and the speed at which the average person makes a career transition might change, but if we zoom out and look at the big picture, so much would still be available and possible. More patience might be required, but don’t use a recession — especially one of the low-key manner in which we are predicted to see later this year — as an excuse to remain stagnant, stuck, and dissatisfied.
Keep this as your mindset as you navigate through the current economic situation and upcoming challenges: There are always new possibilities and opportunities.
Remember too that historically, after an economic recession (which tends to last no longer than 3-9 months), there is typically an economic boom! So don’t forget that all of this is temporary, and like most things in life, this too shall pass.
In conclusion…
We might have to adapt, my friends, but overall it sounds like this could be a LOT worse. In fact, it sounds like this ain’t gonna be nothing compared to COVID, when unemployment was as high as 13.7%! (about double of what we’re looking at with this recession).
Thoughts? I’d love to hear in the comments.
Xo Rebecca
**Why is the unemployment rate predicted to rise so little compared to previous recessions? That’s one thing we can thank COVID for and its contribution to the job seekers market that currently exists. The high number of jobs that are available, compared to the number of people there are to fill them, provides a buffer around the rising unemployment rate
