staying employed during a big recession - were people successful?

[dreams_and_discoveries]

I'm one of these people who very luckily has survived all downsizings, working in banking there have been a few over the years.

It's also a bit unlucky, as I'd have loved a payoff and kick up the a** to get out there and try a new job.

I do believe the more adaptable you are, the easier new roles are to find.

[IllusionNW]

I was a big law junior associate during the last recession.  I do transactional work but, as you stated, that dried up pretty quickly.  I took on whatever random work I could find.  I did doc review and due diligence.  I did legal research for litigation matters.  Pretty much anything I had to do to make my billable hour requirement.

The corporate/M&A group was pretty much dead.  People just aren't doing the big deals that they do during the boom years.  Everyone at my firm took a hefty pay cut, but folks who were able to make their hours were able to keep their jobs.  Also, look carefully about how your firm carries debt.  The firms that ran into the most trouble were the ones that had ridiculous lines of credit and guaranteed compensation for partners.  You can go to Above the Law to see what happened in the US market.  You want to work at a firm that has a solid financial foundation and is risk averse when it comes to leverage.  If your firm is flying classes of 150 summer associates to Caribbean islands for retreats, you might want to be a bit wary.

One other thing to remember about a law firm is that the attorneys are revenue generators.  The partnership can trim the fat, but if they let go of too many attorneys, they cut off their nose to spite their face.  It's far riskier to be in-house during a recession, since attorneys in house are cost centers and "overhead." 

So if I were you, I would make sure to get as much experience as possible, do as much work as possible during a recession, even if it's total garbage assignments, and stay at a law firm.

[Cranky]

I am a full-time college instructor, currently tenure-track. I don't make as much as a software engineer. However, when a recession hits, my job is secure. My consistent W-2 allowed me to buy two houses during the last recession, which are now both cash flowing rentals.

Skiing in Colorado was also very fun during the last recession. Not as much traffic on I-70 or on the mountain.

Indeed, college enrollments tend to go up during recessions, because people go back to school to ride it out.

We were fine in 2008, and we'll be fine the next time around - if it's tomorrow or 10 years from now.

[GuitarStv]

The company that I worked for went bankrupt and laid everyone off after they couldn't get further financing in 2008.  I remember it was very difficult to get a job . . . I applied to more than 300 jobs and got two interviews.

[golden1]

We survived the great recession largely intact because my husband is employed in tech, was a good employee in good standing for 15 years at the company he worked at.  They did eventually force him out a few years later for other reasons (he clashed with the new leadership).  I am also in tech and I got a job in 2011 very easily during the recession despite being out of work for 8 years as a SAHM.  I did get a masters degree while I was not working so I think that helped.  I also priced myself slightly below market in order to be more competitive, but my salary bounced back after a few years with the company.

The people I know that suffered during the recession were a) the dead weight b) good employees but were in hard hit industries and c) young graduates looking for jobs.

[Imma]

I was a bit younger than most people when the big recession hit in 2008. I graduated from high school in spring 2008, aged 18, and for several reasons I decided not to go into fulltime education but to find a job and take a parttime degree. I worked for a temp agency and did all kinds of jobs for years. In my country we had a triple-dip recession, it was really bad. It's only for the past 2 years that the economy has been noticeably recovering. I did years of temp work and shortterm contracts for a lot of different companies. Most of it was AP-type work in finance, but I have washed dishes and sold burgers at events to make ends meet. 

Because the relationship with my (divorced) parents is complicated, I had to leave home too. They weren't able to support me at all in my education either. I grew up in a village and moved to the nearest bigger town because it was one of the (relatively) least affected areas in the country, but the cost of living, especially rent, was very high back then. I found an apartment that cost €800 all-in for two bedrooms and found a roommate, but it still cost me about €500/month when I was sometimes not even making €1000. Looking back I might have been able to live a little bit more cheaply, but I'm glad I didn't. Because I didn't have any fall-back option, I felt I needed a lease in my own name. I had nice neighbours in that apartment too, they were poor as well, but got food from both the food bank and their own parents and they always shared it with me. They lacked practical skills so I helped them out in return.

Basically, I worked for years for very little money and always felt poor, but always managed to get by because of frugality and always managed to keep an emergency fund and some savings. I was never in debt during that time. Things got better when I met my partner and we moved in together in 2014, initially in that expensive apartment. We lived extremely frugally and managed to save up a deposit for a very cheap house that we bought in the spring of 2015, right before the start of a housing boom in here.

I didn't find a long-term, steady job until a year ago, but I'm making a pretty decent amount of money for someone my age/circumstances so I can't say the difficult years have damaged my career prospects. My partner worked a retail job for a company that went bankrupt, but he was made redundant right before that and received a severance package. He then found a steady customer service job that he's still in today. Both of us were never truly unemployed. As we now have an average income and a very cheap home, we feel very rich. We can save, do up our home and invest and still have enough money left over to not feel poor. We have definitely increased our spending in some areas. We lived off rice and beans for years and we're happy we can now afford to eat something else for a change, but we are still very frugal.

7 years of financial uncertainty as young adults has definitely shaped us and we both feel it's very important to keep in touch with people in our network, to not get too settled into a place of employment but keep a plan - B and a plan - C in mind, to keep learning new skills and to have a few side hustles if possible. We also keep our costs down by having a low mortgage, a large emergency fund and investments for passive income. Our savings rate is about 30-40%. We didn't start investing until 2 years ago so we're not at the point where we could live off them, but we would be doing just fine if one of us would lose their job.

[Zikoris]

Last time we had a recession in Canada (2008/2009) I was working for a collection agency, so business was booming! I work in bankruptcy now, so I imagine it would be mega-booming if another one happened now.

Regardless of where I worked, offices don't tend to fire their receptionist in lean times, so I think I would be fine. We have well over 10 years of normal expenses in our investment accounts right now, probably 15 or more if we cut obvious things like our 9K/year international travel budget. We would basically be fine whatever happened.

[Dicey]

I graduated and started teaching high school science in 2008. Remaining employed wasn't a problem for me. My husband (then boyfriend) was an apprentice electrician who lost his job twice during the recession. He ended up going back to school for a bachelor's degree in math at his parents' urging and expense. He's now a journeyman electrician, and we're realistic about the boom/bust nature of his field. We keep at least six months of living expenses in our emergency fund at all times, and we're currently balancing increasing this to a year of expenses while also investing for retirement and saving for a downpayment. We could live our current lifestyle but not save much on his income alone, but on just my income we'd need to make some spending cuts. I'm confident we're in reasonable shape to weather the next recession, but I wouldn't count on being able to shovel money into the market at bargain prices.

You've probably thought of this, but a boom time is good for someone with experience to get in at "safe" employer like a government.  Any one that owns buildings might have someone to do electrical maintenance.  If Hubs can find such a job, he'll have a good chance of having steady work in a recession. 

I used to work in the maintenance department of a large city government.  We had seven electricians maintaining one building (the local airport).  The pay was solid, the benefits great.  Just hard to get in.  Good luck.

I concur, our maintenance guys make bank (I'm a state employee). They actually turn away some side hustle money because they are so booked up on the side from all the state workers coming to them for personal work. They have the best job in our building in my opinion.

It's definitely on our radar. DH has previously applied for positions at the nearby university, but has had no luck so far. For now, he seems to be highly valued by his company.

Check out your local utility companies. Great benefits and Defined Benefit Pensions. As workers retire, companies are hiring their next wave of fresh workers. Seriously, DH was the FNG at his job for thirteen years. Recently, they've hired four New Guys.

ETA: Because he wasn't DH then, I just asked him your question. He said he never worried because nothing changed. They just stopped hiring, which is why he was the FNG for so long.

[Cranky]

Though every recession is different - we lived in the Detroit area in the early 1980s. My dh was in grad school, and I worked at the food co-op, and we had engineers who had lost jobs at the auto companies come around to the co-op looking for work doing anything, because they had run out of unemployment.

The public library in Ypsilanti closed for months because the city ran out of funding.

[Davids]

Obviously while the goal of this group is not to work for 30 years in corporate america I think it is safe to say if you start working at say 23 after college and retire at 65 you will probably have an instance (maybe more) in your professional career where you got laid off/made redundant (that seems to be the new fancy way of calling lay offs... redundancies).

[GenXbiker]

I really never had any worries about being laid off during the recession, and I mean zero worries, due to my senior technical position.  A lot of what I do can't be done by anyone else on staff, so I always felt a pretty solid level of job security.  The organization itself has been very solid.  There's always the possibility of IT being outsourced at any time, particularly to foreign owned companies, but it was never a real concern of mine.  As it turns out, I was right not to be concerned as I have since reached FI, and could FIRE at anytime (great feeling), but I will plan for <2MY.  I could FIRE today with a 2.4% WR and still have about $500/mo cushion on top of my expected FIRE bare bones average expenses if I was to keep living where I am, but I'm planning for 4% WR so that I will have $2000+/mo cushion to allow more fun and flexibility during FIRE and possibly relocating, which is a strong possibility with most scenarios cutting into my stash and/or higher monthly expenses.  Within 10 years after I FIRE, SS will add about $1400/mo to whatever the cushion is.  If stocks are down for a while due to a recession, I feel I am positioned to handle that well without needing to go back to work or do side gigs (although I'm not necessarily opposed to that, either).

During the last recession, I did not panic and cash out of my retirement accounts.  I actually started investing much more heavily into stocks in my non-retirement investments.  I would say the recession is what really got me started with investing in stocks outside of just retirement accounts.  I've been pretty frugal during my adult life and was already saving/investing most of my money before I discovered MMM several years back, so I haven't made any big discoveries here on MMM, but there are still tidbits of useful info that I pick up here and there.

[golden1]

When I moved to my new position a few months ago, one of the things I asked during the interviews was how the company handled the Great Recession, since it is a tier 2 automotive supplier.   They reduced bonuses and offered early retirement, but they didn’t actually fire people.  This is not a bad thing to ask a company if it is a concern. 

[RedmondStash]

I never really worried about recessions, Great or Small. I've spent most of the last 20 years doing contract work in IT, which makes me flexible and agile; I have a broad skill-set with some unusual specifics that make it likely that I can always find something, and that confidence has helped me land jobs during tough times before.

Not because of an impending recession specifically, but just because of the weird political situation in the U.S. right now, we've expanded our emergency fund to around 1 year's expenses. We also took out a HELOC that is nowhere near maxed out, that we could borrow against if we had to. And if all those options ran out before stock recovered from a crash, we could also sell our bonds and live off that $$ for a couple of years. Basically, we've got several emergency measures in place, and I doubt a recession would outlast all of them.

I figure you can live in fear of a dismal future that may not come to pass, or you can live in optimism. I choose optimism, but with some safeguards in place to keep the fear at bay.

[Mr. Frugal Pharmacist]

I graduated from undergrad in 2005. I got a contract position as a document coordinator for a major pharmaceutical company and worked there through the early part of the recession. I didn't lose my job, but they called that time period "The Pharmageddon" because so many drugs were going off patent and there was a huge hiring freeze through much of the industry. It was almost impossible to get hired full-time from contract unless you were banging one of the higher-ups (quite literally in one case). I became frustrated enough with the environment that I left the job in August of 2009 to study to become a pharmacist so that I could become more indispensable. Graduated in 2013.

Been throwing 1000-count bottles of simvastatin across the room ever since.

[nara]

During the 2008 recession I was working at a non for profit in New York City (a school for autistic children). My salary was $45k a year. I survived the recession unscathed. The only thing my agency cut back on was a fancy fundraising event they held each year where celebrities attended. I still got my $3500 pay raise for completing a certification. I bought stocks for the first time ever (I remember buying GM at $3 a share). But the whole mood in the city was kind of depressing. I have been self employed now (our only source of income) for 7 years now. Insurance companies pay our salaries, so I do wonder how a recession will impact us. In the past, my field was generally unaffected. I guess I am just trying to rake in the money while I can..

[pachnik]

Last time we had a recession in Canada (2008/2009) I was working for a collection agency, so business was booming! I work in bankruptcy now, so I imagine it would be mega-booming if another one happened now.

During the 2008/09 recession, I was working in a law firm that did a lot of foreclosure so I was busy.  Right now, I work in a different law firm but the bulk of my work is foreclosure again.  I've basically been earning my living from foreclosure work for the last 15 years.

[Us2bCool]

I work in technical training for a software company. I started my current job in 2006 and was the only member of my team who wasn't laid off in 2009. I think the reason they kept me had not as much to do with being paid less than my more senior co-workers as that I was the only one willing to keep up with the newest technology that our company was creating. Most of them were experts on one product while I was a neophyte at six or seven. I guess they figured I was more able to fill in the gaps with the rest of the team gone.

I'm happy to say that all of my co-workers were immediately hired on by several of our implementation partners so nobody really suffered.

[jscott2135]

Both my husband and I stayed employed and even flourished during the recession (2008 we made roughly 160k and by 2011 we made over 200k).  We both worked in Pharmaceuticals, at the time he was a manufacturing manger, I was a project manager. We were good employees, but I think a lot of it was just luck, our companies were not hit too hard.

[Larsg]

I have survived two major recessions in my lifetime as well as many other mergers & acquisitions. The key besides having good emergency fund is to be very agile - meaning that you need to keep expanding your skills within your industry and then learn related but new industries or functions in order keep adapting. Be willing to relocate, take roles you would have never thought of taking before, and you should always be thinking about your next two positions as soon as you land the job you have. So always thinking ahead about what you will do next. I know this is hard when you work 40-80 hours per week but must be done in order to adapt. Also, in a recession, efficiency is king. No matter your function, if you can always have an eye  to how to do things better - like we do here on the forum - then you will have a better shot at creating your own luck.

Even if you plan to retire young and are focused on accumulation, you should be thinking about your next position and start looking for it now. I always begin my next job search within 6 months of getting a new job, with a plan of leap frogging a level every 1.5 to 2 years. Always keeping on the move helped improve my skills portfolio and helped me adapt through many lean times in fortune 100 firms. Be open, save your money, have fund with it. Sometimes downsizing and mergers can also present tremendous opportunities to free yourself from a situation you hate and can open up many new doors to something better. You just need to have your eyes open and consider all of the possibilities. Often times peers will have their heads down, and some way down in the sand when these things are going on. Keep your chin and head up above the fray, build a rich network of people, and look at this as an opportunity to build a recession proof skill set.

This scenario will hit you many times in your career so good to begin developing the skills now.

[effigy98]

The dotcom crash taught me MANY lessons, especially around staying put and not chasing the shiniest shiny during good times (dotcoms, stressful growth companies, etc). When 2008 hit, I had a great job and there was a lot of what does this mean to us employees, my company was slow to react, but eventually we had wage and bonus freezes, then many layoffs that happen yearly now and even continue to this day. This first mass layoff happened when my portfolio was in the toilet, my real estate (3 properties) had went under water, renters layed off and moved out so I am floating 3 payments, and I was mentally worried because a job loss could hurt really bad this time around. I got hyper motivated at work, pretty much worked 80+ hours a week, and got many promos thru that time. After getting close to burnout, I discovered MMM and started fixing my spending and lifestyle. I am 90% ready for next recession now and will have little worry this time around compared to the last 2 miserable experiences. No debt, large stache, and I would kind of welcome the opportunity to invest 90% of my earnings in the stock market when it goes on sale and I would feel even better to FI during down years which would probably give me higher chance of FI success.

[Gone_Hiking]

The dotcom crash taught me MANY lessons, especially around staying put and not chasing the shiniest shiny during good times (dotcoms, stressful growth companies, etc).

This hits home.  I started my first job as a biologist in late 1998 and soon after the stock market started sliding.  Three years of negative returns.  I did not lose that job.  I left for a position of a computer programmer 2008, right at the onset of the Great Recession.  The idea  behind the move was increasing marketability by combining biology background with software development expertise.  The job was in academia and I survived the recession intact, albeit I extended my time in academia from 3 years to 4.  I remember looking at my 403(b) one day and realizing the stocks were cheaper even than they had been in year 2000.   Having the experience of three years of negative returns at the very beginning of retirement investing gave me guts to invest more money in 2009 and get handsome returns a few years later.

I found another job in 2012 with - 70% salary increase, and the big time.  Project manager in IT. I joined Toastmasters International and started practicing how to say things and to whom, helping my career prospects along the way.  After three years, I moved for another position within the company involving management of product launches - another 25% salary increase.    I acquired PMP certification during that time.  After 18 months, the company announced layoffs and my position was cut.  Looking at the list of positions and ages of employees, the layoffs picked out those with more experience and making more money.  Initial job offer form another company after the layoff cut my compensation by some 55%.  I negotiated a final salary offer at 40% cut.   Had it not been for Toastmasters, I would have never had the gumption to negotiate. 

If the next recession hits next year, we have enough resources on hand to survive a decade of not working without touching retirement accounts.  We are prepaying mortgage, with just a few more years left at this pace, which would allow us to further lower our costs.  I know what kind of questions to ask in a job interview and and that might be my best ticket for securing another employment should my company start layoffs.  I have also been expanding my professional network that can be tapped in times of need - just like I am tapped by members of my network should they need help.

[EricL]

As an investor I share some of MMM's joy at the thought of another Recession.  But as someone at the low end of the economic totem pole in the 90's Recession, I dread it.  It became clear in both Recessions millions of lower class and lower middle class people could tread water in a good economy.  But in a bad one were living (and dying) in desperation. 

I've no desire to see my fellow Americans suffer like that again because of such shit luck and/or poor life choices.  And in the current social and political upheaval it's possible the poor might really eat the rich. Especially since the world seems to be falling under a global oligarchy tone deaf to the poor yet more and more dependent on populists from the ranks of the poor.  Totalitarianism - either from the far left or the far right seems to be progressing in a "heads I win, tails you lose" situation.

Edit: I'll add that while I struggled in the 90s, I was in the Army in 2008.

[skip207]

I left perm employment in mid 07 to start my own business.
We had just got 12 months under our belt in mid 08 when the wobble started.

09 was a disaster, 10 was not much better then the real slam dunk came with 2 feet of snow for the best part of a month (we don't normally get any snow).
It was a tough time and looking back now I am shocked we made it.  Lucky for us we could still live off a small income and we had some reserves.  The main thing was servicing the debt.

We went 3-4 months without a penny at the end of 09 and into 2010.  Hard times but it taught us a lot.  The sad thing is we never really recovered fully and the industry remained very weak until maybe 2 years ago when things started to pick back up but then Brexit came and kapow, another big hit.  We are seeing figures down c.30% now again. 

Some how the media report no recession but I just cant see how it can be we have been struggling since the start of the year and every other small business I know is reporting similar or even worse.

The bonus though is our debt is now paid off so everything we do is for us rather than the bank.  That helps a lot even though sales are down. 

[Schaefer Light]

Even if you plan to retire young and are focused on accumulation, you should be thinking about your next position and start looking for it now.

That's hard to do when you can't think of a single job you'd actually like to do.

[mrsfrugaln]

During the 2008 recession my husband and I both worked for banks. His bank actually went under and got acquired by another bank through TARP funds. I worked in mortgage lending at a regional bank that was on the brink of failure and got bailed out by a private equity/TARP investment. It was a very scary time (especially when you realize your home is worth half of what it was when purchased in 2003 and the neighborhood is going to pot) but we managed to get through it without a layoff. My husband heard rumblings his audit group would be let go and saw an open position  with a workout group. He knew the hiring manager in the department well, got the job and spent 5 years collecting debts from small and medium size businesses (a booming area during recessions). It was depressing for him at times but it kept income flowing. I was lower on the food chain and relatively cheap at the time so I survived the multiple rounds of layoffs. This may help you too - I saw a lot of senior, overpriced people getting paid more than the value they added get let go. In the past 5 years of my career, I've built a more specialized knowledge set for my company that now they want me there more than I want to be there (I work part time). The key is networking, have a willingness to keep learning and pivot into other areas if needed. Also having a good size emergency fund helps and gives you confidence in your ability to weather tough times.

[Whatsername]

I've worked at the same company in the oilfield since 2007. 2008 was bad but not near as bad as 2015-2016. We had a couple layoffs as well as no 401k match, raise freezes and bonuses were very small and didn't even get one once. I saw a ton of friends and co-workers having to sell new trucks, cars, boats, homes and several other items that they spent their money on just to get by. This industry is either feast or famine. Now those same people are buying new trucks, cars, boats and houses. Most here just don't care about the future.

[Imma]

We went 3-4 months without a penny at the end of 09 and into 2010.  Hard times but it taught us a lot.  The sad thing is we never really recovered fully and the industry remained very weak until maybe 2 years ago when things started to pick back up but then Brexit came and kapow, another big hit.  We are seeing figures down c.30% now again. 

Some how the media report no recession but I just cant see how it can be we have been struggling since the start of the year and every other small business I know is reporting similar or even worse.

I'm in Europe and we do a lot of business with the UK. I definitely see what you are seeing. Our customers are not in a position anymore where they can purchase our products, because our prices (in €) have become way too high for them and because they're losing so much business themselves.

One reason why I'm interested in reading this thread is because I struggled a lot during the last recession and only found a well-paying, steady job in 2016 and I wouldn't be surprised if I'll eventually lose it again. Brexit isn't the only reason for concern but it is a major issue.

[skip207]

Our saving grace is we no longer have debt and we only employ a few people.  If needs be we can baton down the hatches for 12 months.

After that we would struggle though.  12-18 months and we would probably have to seriously consider calling it a day as its just not worth it putting in 10-12 hour days, 6 days a week for nothing.

[MsSindy]

So my question to all of those with a 'job'. What are you doing for the next recession that is going to hit? Are you ready if it hits in the next 30 days? If not, what steps are you taking?

The 2008 recession woke us up from our spending stupor and set us on the path of FIRE - so we're ready for the next one. 

What helped us in the 2008 recession is that we already had some savings and lived a moderately low-key life compared to our income.  The refinery my DH had worked at got shut down and it was a slow cutting of personnel.  All his colleagues started panicking because they all lived paycheck-to-paycheck.  Over 80% moved out of the state to take other refinery jobs around the country.  We stayed put and knew we had some time to look around, and my DH's skills are very good.  He was able to land a local job (7 miles away!) at a nuclear plant, and received a 17% increase in pay, with no unemployment time.  So, waiting allowed us the luxury to be patient and selective. 
Almost all his colleagues have moved back into this area where their roots are - I can only imagine the toll of buying and selling houses and such has taken on their finances.  One guy used a hiring bonus he got and bought a new Lexus... I guess he didn't learn anything from the events...

[JoJo]

So my question to all of those with a 'job'. What are you doing for the next recession that is going to hit? Are you ready if it hits in the next 30 days? If not, what steps are you taking?

Based on the last recession, it took years to feel the full effect, bottom out on stocks & real estate, layoffs, etc.

When my company did layoffs, it provided severance so if it happened soon, I'd be eligible for 22 weeks of pay & some additional benefits.