Recession Corrects Great Resignation Dream

Recession forces businesses to rethink

The US Fed pumped trillions of dollars into the economy, as did most governments worldwide.

It created a false reality.

Stimulus checks were paid out, and share prices went through the roof.

Everyone felt rich and so didn’t feel that work was so necessary. This caused the Great Resignation.

Instead of working, everyone thought they could get rich from HODLing Bitcoin, riding Gamestop to the moon, flipping phony NFTs, and having Netflix and Zoom shares hit unfathomable multiples.

Meanwhile, there is a severe skills shortage, salaries are soaring, and companies cannot find the staff they need to run their businesses. The employees start to call the shots.

Then the music stopped.

The tech stocks have lost 80% of their value in 5 months, startups have imploded, and VCs have faltered. Then, inflation hits record highs of 8%+, and companies start to redundiate people.

The party is over. And those that indignantly resigned are begging for their jobs back in the Great Regret.

Once the bubble has popped, and funding has dried up, people must rely on old-school common sense commercials, like cash flow, margin, and profit. Now, the snubbed concept of profit has become the judge and executioner for many companies.

The one thing we have learned from this rollercoaster ride of the last two years is that remote work is a viable alternative to face-to-face. As the world quickly moves from products to services, from bricks to bytes; the way that we work has changed forever.

Profits become popular again

As the economy starts to bear down on us all, and cash flow and profits become as important as oxygen, businesses look for ways to bring the bottom line back into check. They are forced to make difficult cuts, while also working hard to revive their business. It is enormously difficult to cut costs simultaneously as rebuilding a business, within a downward market.

This is when businesses re-visit the concept of offshore staffing. The allure of accessing infinite labor pools of highly-capable staff at a 70% discount becomes even more alluring when times are tough.

People realize that they can recruit people sitting overseas for a fraction of the cost. When times were good, this seemed unnecessary. But when things get real, saving 70% sounds pretty good.

Outsourcing and offshore staffing has commonly been countercyclical. This means that when the economy is suffering, businesses look to offshore staffing services to help save them money. This creates a boom time for outsourcing.

The question for your business:

Are you joining the growing wave of offshore staffing?

Read more thought leadership articles here:

• Tight labor market bubble?
• Work – it’s complicated!