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Great Resignation quitters got big raises—now, they're worried about their job security

Chad Springer | Image Source | Getty Images

Millions of Great Resignation quitters traded up into higher-paying jobs. Now, they're experiencing a dose of layoff anxiety.

More than half (56%) of people who started a new, better-paying role in the last year are worried about their job security, according to financial services company Bankrate, which surveyed 2,458 U.S. adults in August.

The survey found that job switchers, who tend to see larger pay gains than people who seek raises from their current employer, are the most anxious about their future employment status.

Fears about getting let go are twice as high among those who partook in the Great Resignation as those who stayed put at their company and got a pay raise (28%).

And a potentially looming recession may have something to do with it.

'Last one hired, first one fired' 

A vast majority of U.S. CEOs (91%) believe we're headed toward a recession, according to a recent KPMG survey of 1,325 CEOs. Fifty-one percent of them say they're preparing for that downturn by reducing headcount.

Newer employees are among the first to be targeted for job cuts by companies in a recession due to a popular "last one hired, first one fired" approach, Bankrate analyst Sarah Foster tells CNBC Make It.

For example: The average length of service for 17,000 laid-off employees was 1.2 years, half as long as the average tenure of their colleagues, according to a September report from Revelio Labs, a workforce analytics firm.

Last hires are often more junior, younger and have less experience, Julia Pollak, chief economist at ZipRecruiter, noted in the Bankrate report.

"Employees do often become more valuable the longer they stay at the company, and if you're going to cut someone, you'd rather cut someone who hasn't accumulated all the firm-specific knowledge," she added. 

At some companies, marketing budgets, human resources employees and contract workers are often the first to go, Foster notes.  And industries that seemed hot just months ago — like tech, retail and real estate — are scaling back hiring.

"People followed the money and took jobs in industries that were growing fast and offering competitive wages," Pollak explains to CNBC Make It. "Now, a lot of those markets, like mortgage lending or real estate, have grown to a standstill, thanks to a huge increase in interest rates."

Some job switchers might have accepted new offers with higher pay without considering the company's long-term stability and if it could be susceptible to recessionary pressures, Foster points out.

"We're seeing the pendulum shift the other way, where the industries that were thriving are now some of the most vulnerable to disruption during a downturn," she says. "In a recession, making higher pay could put you in a better position at first, but what's more sustainable is whether you keep that job in the long run."

What you should do if you're worried about your job security 

The good news is that widespread layoffs, a hallmark of recessions, have not yet transpired.

In August, the number of layoffs nationwide was little changed compared to July at 1.5 million — a mere 1% of the U.S. workforce — and remained below pre-pandemic levels for the 18th straight month, according to the Labor Department.

Still, if you're worried about losing your job in a coming recession, Foster recommends thinking about what you bring to the table and how you contribute to the company's bottom line.

Consider asking your manager what skills you could expand on, and double down on the attributes that make you an irreplaceable employee. Strengthening your workplace relationships, especially with higher-ups and executives, will give you more negotiating power, too.

"If you have a demonstrated track record of being a solid employee and senior leaders know your name, that credibility can only help you," Foster says. 

Plus, it's still a good time to switch jobs: All industries in the U.S. still have more job openings than they did before the Covid-19 pandemic, and employers hired three times as many people as they let go in September, Bankrate found.

If you start job-searching again, consider how your potential employer might weather a downturn. Check professional sites like LinkedIn or recent news coverage to see whether the company has paused investments or expansions, or recently laid anyone off, Foster suggests.

And if you do get laid off, you probably won't be out of work for six months or longer.

Federal Reserve officials expect the unemployment rate, now at 3.7%, to rise to 4.4% in 2023. That increase isn't nearly as severe as in previous recessions: Unemployment rose by 11.2 percentage points during the height of the Covid-19 pandemic and 5.3 points during the Great Recession, Bankrate reports.

"There are always people retiring, resigning, going on maternity leave, leaving jobs for whatever reason," Pollak says. "There are always opportunities out there, no matter what the economy looks like."

Check out:

CEOs are preparing for a recession. Their plans could backfire

The 4 most 'recession-proof' industries to work in, according to economists

3 'recession-proof' skills that are in-demand even during a downturn, according to economists

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This artist's side hustle brings in up to $267K per year
This artist's side hustle brings in up to $267K per year