Good time to worry about the next recession

It can be quite depressing to read recent job news surrounding Singapore. Here are a few headlines I’ve gathered:

• January 8, 2015 - Standard Chartered job cuts: Singapore affected
• February 12, 2015 - Barclays cuts hundreds of jobs in London and Asia
• March 2, 2015 - Goldman said to cut Singapore investment bank jobs by 30%
• March 3, 2015 - CIMB cuts 15 jobs in Singapore a week after 50 elsewhere in Asia
• June 10, 2015 - (HSBC) Singapore staff awaiting update on job cuts
• June 12, 2015 - Energy industry job cuts top 150,000 worldwide (excerpt: Southeast Asia hasn't seen substantial job losses, Swift said, but that could change in Korea, China, and Singapore as orders haven't come in as much as in the past.)
• And many more…

With a scarred memory inflicted over the Global Financial Crisis, it seems like 2008/2009 all over again. Back then the banks were also the first to start slashing jobs with the collapse of Lehman Bros kick-starting the fiasco.

And as usual, there are experts that are saying otherwise. Many are insistent that things are robust and we are much more capable to handle another meltdown.

And we certainly aren't looking at another one to begin with.

So should we worry?

Have you seen a fruit seller telling you his fruits are rotten? Or a used car salesman pointing out the lemon cars in his collections? Or maybe a financial planner dissect and critique the policies his agency is representing?

I do a triple eye-roll whenever I read an "expert" contradicting against what the facts are saying.

You need to begin by looking at who that opinion is coming from and if there would be any vested interest from them to comment in that manner. E.g. I'm reading many top honchos from recruitment agencies telling us everything is sunshine and rainbow.

Recruitment agencies are highly dependent on companies hiring. The more they hire, the better their business would be. Which is why recruitment agencies tend to suffer big-time during the recession. Even if they focus very much on temp and contract staffing, the drop in volume alone will create a huge dent to their bottom-line. So it doesn't make sense for them to prophesy a scenario they do not want to go through.

What about economists from banks? Surely those people know what they are talking about with their finger on the economy pulse.

As the saying goes, a rising tide lifts a thousand boats.

If the banking tide is low, every bank will inexorably suffer. So would they contribute to that? I don't think so.

How accurate is YOUR prediction?

I may be entirely wrong and I hope I am but my simplistic mind tells me to better err on the side of caution.

According to an email survey by LinkedIn to 542 Singapore workers in February and March 2015, 35 percent said they were looking for new jobs. This is up from 27 percent last year.

Before Singapore businesses can adapt to the rising wage costs brought about by the tight unemployment rate and the drought in business because of drop in exports, they also have to tackle the impending departure of their staff.

It is a matter of time before the rubber bands snap and companies start throwing in the towels.

Many companies who are so reliant on manual labour have already surrendered.

So what should I do?

And what's the harm of preparing for a recession that might not materialise? If the market is going to be even better, I'm sure you are better positioned than your peers to attract and grab onto new opportunities.

1. Clear your debt

Starting from 1 June 2015, borrowers with unsecured debt of over 24 times their monthly income will find their borrowing facilities suspended. As at February this year, some 32,000 borrowers will be affected.

Not every one of us will have such an insurmountable amount of debt but most of us would have in some form or another.

I personally attended a preview session by Credit Counselling Singapore to understand how they work, and there were at least 160 attendees. I was told that they hold such sessions thrice a week and it is always full house. So you can imagine the number of people that needed help.

Loan financing is impossible when you lose your job. So while we are smelling roses in the air and seeing rainbow everywhere, you would want to prioritise a larger chunk of your income to settle those outstanding as soon as possible.

2. Make yourself indispensable

The ones that usually get the pink slips are usually the ones that the company could live without for the time being. So if you could, get yourself involved into every aspect of the operations.

Volunteer for new projects, take on more responsibilities, and be prominent during meetings.

Now is the time to be the go-to person so your company will know the importance of your existence in the business.

3. Invest in another skill set

Just like how you would spread out your investment dollars over a variety of stocks, you should apply the same philosophy and not put everything into a single basket. Look at what the market is trending towards and ask yourself if that is something that will continue to be in demand over the next two to three years.

According to a study by The National Association of Colleges and Employers (NACE), a Bethlehem, PA non-profit group that links college career placement offices with employers, the top 10 skills that would be in hot demand over 2015 would be:

1. Ability to work in a team structure
2. Ability to make decisions and solve problems (tie)
3. Ability to communicate verbally with people inside and outside an organisation
4. Ability to plan, organise, and prioritise work
5. Ability to obtain and process information
6. Ability to analyse quantitative data
7. Technical knowledge related to the job
8. Proficiency with computer software programs
9. Ability to create and/or edit written reports
10. Ability to sell and influence others

Take some time to second skill yourself in those areas. It could be taking a WSQ Advanced Certificate in Training and Assessment (ACTA) and give yourself an opportunity to deliver WSQ programmes as a trainer. This might become a hot area when the SkillsFuture initiative kicks in from January 2016.

Or get yourself trained in a computer software program as more and more start-ups require tech talents to do up their web app or become a CTO in the new entity.

4. Spruce up your LinkedIn and resume

More than anything else, you have to keep your awareness level high so that you can be found online and ensure you are the first to go to the job market in case you do get the chop.

With more and more recruiters adopting LinkedIn Talent Solution to source for candidates, you do not want to be anywhere outside that radar. By using an intelligent combination of keywords optimisation and offering value via regular status updates, you can draw attention from any employer who has access to the internet.

Beyond that, ensure you have a consistent bio across any online platform that you are on.

Sourcing techniques that are highly utilised in advance market such as USA are already showing recruiters how to x-ray any form of online presence (think: github, airbnb, pinterest, etc.) to help companies find the talents they need to survive.

But that can only be possible if you know the right keywords to embed into all your online profiles with the correct messaging to go with it.

5. Pick up tell-tale signs

Companies tend to keep news of retrenchment close to their chest until they sorted things out with PR and the unions. Even if the company is small, you probably won't be informed months ahead as there is always the paranoia that employees will switch off entirely or start doing funny stuff that will aid fuel to the current fire.

However there will be tell-tale signs that you can easily pick up which might be pointing to that direction:

a. High-level meetings on a more frequent basis.
b. Regular management meetings are getting from two hours to one full day.
c. Headcounts for attrition are not being replaced.
d. Salaries getting delayed.
e. CPF contributions getting delayed.
f. Top management are not visible – either they are busy fighting fire or they are out looking for an escape.
g. Quarters after quarters of red ink.

You may not witness every item on the list but a high concentration of them in any combination would be a cause for concern.

Conclusion

Having been through the dot-com crash, SARS, and global financial crisis, the events play out in the same manner despite the trigger.

Only the fittest can survive when things get messy.

Start building up on what you need to boost your survival.

Again, the worse might not occur but what do you get to lose by planning for it?