Recessions are much more common than you may think. Since 1948 there have been 11 recessions – approximately one every seven years! Our economy has been on an unprecedented growth run since the mortgage collapse of 2008, and this has clouded the perception of many young sales professionals. Professionals graduating from college in 2010, for example, have seen 12 straight years of economic expansion!
A recession refers to a significant economic decline (typically for two consecutive quarters), reflected by the country’s GDP and other indicators like unemployment. With economic forecasters predicting a recession this year.
Whether you have been laid off or are transitioning into a new career or industry in sales, it’s important to consider several factors as you look for your next sales job. Here are four tips for choosing the right company to further your career:
1. Choose a “recession-proof” industry.
There are quite a few industries and even sub-sectors within industries that are considered ‘recession proof’ – or less impacted by recessions. Some of these include:
- Consumer staples
You may also want to consider companies that fall under ‘sin’ industries – alcohol, tobacco and gambling. These companies historically are less impacted by the economic turmoil caused by a recession. Several research studies indicate that sin stocks like Philip Morris (PM) and Diageo plc (DEO) have historically outperformed the broader stock market by 2-3% per year on average. That’s very significant when compounded over long time periods.
2. Choose a well-funded company.
In the startup world, which includes many technology businesses, it’s easy to get enticed by a great idea or product and the promise of a big payout. But how well is the company really doing? Look for companies that have raised enough money to ride out the recession. Both Crunchbase and Pitchbook are great resources for finding funding information. Companies should have enough cash to cover at least one year of expenses.
Look for companies that have recent funding rounds, and really consider staying away from early companies that are in seed or A rounds. Later stage investments such as C, D and F are most likely to be more established. It’s also a good idea to look at Private Equity-backed businesses. These tend to be more mature businesses that are in hyper-growth mode.
Do your due diligence before accepting an offer. The last thing you want is to start a new job in a recession and then get laid off because the company can’t sustain that level of employment.
3. Look for tenured leadership
When the going gets tough, it’s important to have a leadership team that’s been around the block. They’ve experienced economic highs and lows before and are less likely to get rattled. They have the focus to stay the course, make smart decisions and come out of the recession even stronger than they were before.
When you’re considering applying to a company or accepting an offer you already have, do some research on the leadership team – not just in the company overall but on the sales team. Leaders who have survived periods of economic instability in the past are much more likely to make the decisions that will keep the company going and keep the staff employed.
4. Focusing on tech? Understand the difference between ‘need to have’ and ‘nice to have’ solutions.
If you’re looking for a job in tech sales, align yourself with a company that offers solutions or services that are ‘must haves’. These can include:
- IT Security
- Network Infrastructure
- Business Operations
It’s always a good idea to choose solutions that are mission critical to companies’ workflow. For example, companies will always have to secure their business, their data and/or their clients. Not doing so is not an option. This is especially true in tough economic times, because cybercriminals thrive in times of uncertainty. At the start of Covid-19, Google saw more than 18 million daily email scams related to the pandemic in a single week. Additionally, many industries will always be accountable to compliance regulations.
‘Nice to have’ tech products and services are typically the first to be cut from a budget when a company tightens its belt. It’s the same with consumers’ budgets, when you’re considering a B2C product.
Recessions WILL happen; during a 45-year career, you’re likely to experience six or seven. But hiring doesn’t freeze entirely during these periods. Companies are just looking to invest smartly instead of aggressively. Be proactive and look for the right opportunities at the right companies, and you will be just fine.
What happens if you get laid off? Read more here.