How safe is your finance career now, with the economic downturn worsening, layoffs at financial firms continuing, and terrible times for real estate-related businesses?
Some finance specialties, such as accounting, are more recession-proof than others, according to experts. According to Kathleen Downs, division director, finance and accounting, for Robert Half International’s Orlando, Florida office, certain industries will continue to be strong employers of finance professionals, including software development, healthcare, public accounting, internal audit, and commercial construction.
“If a company is publicly traded, it still has to do financial statements and present financial statements to its capital suppliers,” she explains. “Taxes must be paid, and firms require corporate analysts to perform forecasting and variance analysis.”
According to Jonathan Claggett, president of DellBridge, a Columbia, Maryland-based accounting and finance search business, demand for clerks and staff-level candidates is strong, while demand for senior financial experts is challenging. “For the past eight months, I’ve seen solid senior prospects on the market,” he says.
According to data from Chicago-based outplacement agency Challenger, Gray & Christmas, financial services companies have made the most cuts, with 129,000 people laid off in the first three quarters of 2008.
“There has been a lot of instability,” says Scott Stern, CEO of Lenders One Mortgage Cooperative in St. Louis, “that has touched not just mortgage firms directly, but those professions linked with the mortgage sector, such as title, real estate, and appraisal.” Prime mortgage lenders with a long track record of doing business through down real estate cycles are the most stable employment, he adds, if you want to stay in mortgage lending.
While the mortgage business is cyclical, Daniel Jacobs, CEO of 1st Metropolitan Mortgage in Charlotte, North Carolina, points out that it is constantly active. Account executives and loan officers who have created loyal customer bases in the good times fare the best during downturns. “People want to do business with someone who builds, or at the very least keeps, the relationship,” he adds.
!Despite job losses in housing-related industries in the winter of 2008, other industries are performing well, according to John A. Challenger, CEO of Chicago outplacement firm Challenger, Gray & Christmas. “If the economy enters a full-fledged recession, it will almost certainly be due to a decline in consumer spending as well as the effects of rising energy prices,” he argues. “In that situation, job cuts in areas like retail, consumer products, and transportation are likely.”
- Carl Wellenstein, CPA, a career strategist for ExecGlobalNet in Downey, California, recommends expanding your professional network. He recommends making friends with people in sales, facilities management, and manufacturing. “Be the go-to person for other departments when they have a problem or a query so that people regard you as a businessperson who happens to be an accountant, not just an accountant.”
- Faith Xenos, founder of Singer Xenos Wealth Management in Coral Gables, Florida, advises focusing on high-net-worth clients. “You’re clearly experiencing bad effects if you’re related to the midlevel consumer marketplace,” she says. “At that level, I’ve heard of companies laying off half their workforce.” I’d stay away from the major corporations since they set such aggressive expectations and don’t give you enough time to reach them.” She, on the other hand, takes on clients through referrals, such as the children of her high-net-worth clientele.
- Downs recommends that you keep or increase your information technology skills, certifications, and licenses. If you need to look for work, having a certification and good technological abilities will help you avoid layoffs and put your rsum at the top of the pile.
- Claggett advises lowering your wage expectations. “A tight market has drove increased pay over the previous couple of years,” he says. “Salaries may fall as more finance professionals compete for positions.”
- Expect to be given increased responsibilities. Clagget explains, “You might be working more since everyone is running a reduced crew.” “Just put your head down and work even harder.”
What jobs will survive a downturn?
8 industries with the best job security during a downturn
- Health-care services. People get sick and require medical care regardless of the state of the economy, thus the demand for health-care occupations is fairly stable, even during a downturn.
During a recession, what jobs are at risk?
The advent of artificial intelligence and automation will coincide with the next recession, putting all occupations that a computer or robot can do faster and better in jeopardy. “If organizations can utilize cheaper software and robotics to complete tasks faster and more correctly, it will surely effect people’s job security,” says Yaniv Masjedi, chief marketing officer of corporate communications provider Nextiva. Jobs in manufacturing plants, secretarial functions, inventory management, and responsibilities in the food preparation and service business are among the most susceptible, according to Masjedi. “Because these tasks are highly repetitious,” Masjedi says, “automation can replace such a workforce with robots that can duplicate the movements with 99 percent accuracy, greatly lowering the danger of failures and error.” “Health crises like as pandemics have no effect on robots or software programs, making it an even more realistic alternative for corporations that wish to maintain operations without endangering anyone’s health.”
Which industry is immune to the downturn?
A recession-proof business can be extremely profitable for people in both good and bad times. Whatever the state of the economy or the stock market, certain company concepts, such as those listed below, have a good possibility of succeeding despite the rest of the financial doom and gloom.
Many well-known or historically successful enterprises were founded during economic downturns. The Walt Disney Company was created in the late 1920s, at the commencement of the Great Depression, and the Hewlett and Packard electronics company was founded in the late 1930s, during the second recession.
Rising interest rates and shifting GDP pose far less of a threat to the finest recession-proof enterprises mentioned below than they do to most other businesses, with many of them having the ability to do even more business than usual.
Food and Beverage Business
Because everyone still needs food and drinks to live, the food and beverage business is one of the most recession-proof industries. Because it is not a luxury that can be put aside in difficult times, enterprises in this area can thrive even in a downturn.
During a recession, who suffers the most?
The groups who lost the most jobs during the Great Recession were the same ones that lost jobs throughout the 1980s recessions.
Hoynes, Miller, and Schaller use demographic survey and national time-series data to conclude that the Great Recession has harmed males more than women in terms of job losses. However, their research reveals that men have faced more cyclical labor market outcomes in earlier recessions and recoveries. This is partly due to the fact that men are more likely to work in industries that are very cyclical, such as construction and manufacturing. Women are more likely to work in industries that are less cyclical, such as services and government administration. While the pattern of labor market effects across subgroups in the 2007-9 recession appears to be comparable to that of the two early 1980s recessions, it did have a little bigger impact on women’s employment, while the effects on women were smaller in this recession than in previous recessions. The effects of the recent recession were felt most acutely by the youngest and oldest workers. Hoynes, Miller, and Schaller also discover that, in comparison to the 1980s recovery, the current recovery is affecting males more than women, owing to a decrease in the cyclicality of women’s employment during this period.
The researchers find that the general image of demographic patterns of responsiveness to the business cycle through time is one of stability. Which groups suffered the most job losses during the Great Recession? The same groups that suffered losses during the 1980s recessions, and who continue to have poor labor market outcomes even in good times. As a result, the authors conclude that the Great Recession’s labor market consequences were distinct in size and length from those of past business cycles, but not in type.
Do banks fare well during a downturn?
First, during a recession, interest rates tend to fall. Because banks’ principal business model is to lend money and profit, lower interest rates tend to result in reduced earnings. For instance, if a bank’s average vehicle loan interest rate is 5%, it will make significantly more money than if the average rate is 3%, all other circumstances being equal.
Second, and more importantly, during recessions, unemployment tends to rise, and more consumers get into financial difficulty. Consumers sometimes have difficulties paying their bills during recessions, which can result in an increase in loan losses for banks.
The longer answer, though, is that each bank is unique. Consumer banking (accepting deposits and lending money) is very cyclical, particularly for banks that specialize in riskier forms of lending like credit cards. Investment banking, on the other hand, performs even better during stormy times, therefore banks with strong investment banking businesses typically see profits hold up well. Goldman Sachs, for example.
Which businesses prospered during the Great Depression?
Chrysler responded to the financial crisis by slashing costs, increasing economy, and improving passenger comfort in its vehicles. While sales of higher-priced vehicles fell, those of Chrysler’s lower-cost Plymouth brand soared. According to Automotive News, Chrysler’s market share increased from 9% in 1929 to 24% in 1933, surpassing Ford as America’s second largest automobile manufacturer.
During the Great Depression, the following Americans benefited from clever investments, lucky timing, and entrepreneurial vision.
Who profited from the financial crisis of 2008?
Warren Buffett declared in an op-ed piece in the New York Times in October 2008 that he was buying American stocks during the equity downturn brought on by the credit crisis. “Be scared when others are greedy, and greedy when others are fearful,” he says, explaining why he buys when there is blood on the streets.
During the credit crisis, Mr. Buffett was particularly adept. His purchases included $5 billion in perpetual preferred shares in Goldman Sachs (NYSE:GS), which earned him a 10% interest rate and contained warrants to buy more Goldman shares. Goldman also had the option of repurchasing the securities at a 10% premium, which it recently revealed. He did the same with General Electric (NYSE:GE), purchasing $3 billion in perpetual preferred stock with a 10% interest rate and a three-year redemption option at a 10% premium. He also bought billions of dollars in convertible preferred stock in Swiss Re and Dow Chemical (NYSE:DOW), which all needed financing to get through the credit crisis. As a result, he has amassed billions of dollars while guiding these and other American businesses through a challenging moment. (Learn how he moved from selling soft drinks to acquiring businesses and amassing billions of dollars.) Warren Buffett: The Road to Riches is a good place to start.)