A great deal of debate is unfolding regarding the nature of the current economic recovery. There is no doubt that a recovery has been underway and reflected in the stock market. In fact the Dow has seen a 45.8% increase since its March 9th low. The debate centers around how the recovery has unfolded, i.e. with less bad economic data and cost driven improvements in corporate earnings. It is the latter point that should be of concern for the 90.6% of people who are still currently employed.

A vast majority of public companies that have reported positive earnings growth in the most recent quarter have seen flat to decreasing revenue. In fact, today’s WSJ quotes a Goldman Sachs study that states that only 23% beat earnings expectations in the second quarter. That means that most companies improved earnings by decreasing costs, especially SG&A (selling, general and administrative costs), which usually translates into people. This is why earnings have improved, while job losses continue at a high rate. Hence, the concern about a “jobless recovery.”

The problem with a jobless recovery is that it would be short-lived. Companies can only cut costs so far until they can no longer operate. Until consumers start to spend again and company revenues increase, the recovery could fall flat on its face and fizzle. While this may or may not unfold, you can rest assured that the cost cutting will continue for the next several months. Unemployment usually peaks months after the official end of a recession.

The key is to reduce your vulnerability to the next tranche of job cuts at your company. The best way to do so is to become as indispensable as possible. A good rule of thumb is that the closer you are to your end-market consumer, the better. Of course not everyone can be in a position to touch the consumer. But nothing is stopping you from thinking about the consumer and acting in ways that mutually benefits the consumer and the company. Elimination of waste, smarter ways of doing the work, taking on new skills that improve your effectiveness and eliminating bureaucracy are examples of activities that add value to the company. Don’t wait for someone to ask, just do it.

Be sure that your manager is aware of your efforts. Don’t worry about looking like a kiss-up. Your manager is probably under great pressure to improve results and will likely be appreciative of your willingness to go above and beyond.

These are scary times for employees, as we all know. But please do not make the mistake of  “keeping you head down” thinking it will somehow protect you. Instead, lift your head up and look for opportunities to make your business better.

This entry was posted on Monday, August 31st, 2009 at 11:44 am and is filed under Career Advice. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.