What opportunities companies and employees should now seize!

professional recruitment

According to experts, Germany is not only heading for a recession. Germany are already in the middle of it. After a long phase in which the order books in all sectors of the economy were full to bursting, this may not feel like it yet. But the current labor market figures show in black and white that economic strength is weakening. Some employers are already responding with job cuts. But there is another way. Employers and employees can also actively use the opportunities of the situation for themselves.

Recession: The fat years are over

There’s no denying it any more: The years in Germany seem to be over for the time being. Industrial companies in particular are reporting declines in orders. There are many reasons for this. Trade conflicts, the generally weaker global economy and the continuing uncertainties surrounding Brexit are currently making life difficult for export-dependent industries in particular.

These sectors are particularly hard hit by the recession:

  • Textile industry
  • Manufacturer of electrical equipment
  • Metal production processing companies
  • Manufacturer of metal products
  • Mechanical engineering
  • Car industry
  • Manufacturer of paper and cardboard

The first signs of the economic downturn are already manifesting themselves in figures. In the spring, the economic research institutes DIW and RWI predicted growth in gross domestic product of 0.8 percent for the current year. They have now corrected this figure downwards by 0.3 per cent. Economic researchers are also no longer as optimistic for 2020 as they were at the beginning of the year. They lowered their forecast from 1.8 to 1.1 percent.

Redundancies and Savings Programmes

What looks like a relatively small leap in numbers already has a significant impact on the economy. In industry, employers are responding to the recession forecast with layoffs and austerity programs. But are such massive restructuring programs really the last resort? What if the economy unexpectedly picks up again and orders can no longer be processed because there is a shortage of the same skilled workers that the employer said goodbye to a few months ago?

Who knows at a time when political conditions, order situations or customer needs can change overnight? Even with a good knowledge of the markets, industries and companies, it is only possible to make vague forecasts as to where the trend is actually heading. So the danger is great: if you hurry to make the wrong decisions to shrink your company to a healthy size, you could end up as a loser.

Some companies have learned from the past recession

Many companies have already made such experiences and learned from the past. The aim here is to lose as few highly qualified employees as possible in production and management through redundancies. Here one already knows that one cannot do without the competences of these key employees in the long run.

Professor Michael, head of the HR:Lab at APRIORI in Frankfurt, finds this decision welcome: “In the economic crisis ten years ago, companies had to painfully experience that a hasty reduction in employees is harmful in the medium and long term. Specialists and managers who are made redundant today can only be reinstated later at great expense – if at all.”

Short time work instead of job cuts during the recession

The method of choice: short-time work instead of job cuts. One of the more prominent examples of this approach is the automobile manufacturer BMW. It is holding on to thousands of highly qualified people by not putting them outside the door, but merely shortening working hours with corresponding salary adjustments. Employees at Opel’s main plant in Russelsheim will also be cutting their working hours for the first time for six months. Here, the decision has been made in favor of short-time work.

These are not isolated cases. According to a survey by the IFO Institute, 12.4 percent of employers in the manufacturing sector expect to have to introduce short-time work in the next one or two quarters. The number of companies with short-time work has thus reached a level last measured at the peak of the 2012/13 recession. The number of short-time workers had risen to just over 100,000 at the time.

Labor market gains momentum

But for once completely independent of which way organizations take to secure their economic power. One thing is certain: The labor market is starting to move again as a result of the downturn. And that doesn’t just mean bad things. On the contrary. “Particularly in economically difficult times, there are great opportunities for both sides on the labor market. When you know how the market works,” stresses Sebastian Berblinger, CEO of APRIORI.

If less needs to be done, the time gained can be used for future investments, for example. Phases of short-time work can be used, for example, for the targeted further development of employees. If the economy then picks up again, the workforce will have more specialist knowledge at their disposal and will be able to contribute better than before. Companies thus benefit considerably from an increased innovation density and stronger economic power.

Recruit highly qualified employees

Especially since not all companies feel equally bad during a recession. Healthy companies currently have the opportunity to recruit highly qualified employees who have just been laid off by one of the weakening big players.

Especially for employees who are willing to change jobs, it is therefore all the more worthwhile to push ahead with their own career planning. If you wait too long, you may miss the opportunity to make the jump in time in order to avoid a reduction in staff. This does not make itself so well in the curriculum vitae. But those who move to the right company at the right time can give a boost even in recessive phases of their career. Because employees can be sure that a company that hires them now will plan long-term with them.

Published by Dave John

Decade of work experience in leadership consulting with strong focus on talent acquisition & assessment across different industries and geographies.

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