Recession Fatigue and Occupational Burnout

After two years of pandemic lockdowns and a shift from working in the office to working remotely has culminated in what economists call "recession fatigue." This appears to be an extension of "The Great Resignation" where stress associated with an abrupt change in the way we work and live caused many people to feel the effects of occupational burnout. Now, in an atmosphere of economic uncertainty, people find it hard to stay financially disciplined.

The Looming Recession

Experts predict a spectrum of outcomes for the current recession, from a mild blip to a depression that will be difficult to overcome. To determine the sentiment of this period, Bankrate conducted a survey on recession fatigue and personal finance. Among their findings, 1 in 3 Americans say they aren't ready for a recession, and have taken no actions to prepare for the potential economic outcomes that will impact their employment status and bank balances. According to the survey, it appears clear that Americans are experiencing recession fatigue. This phenomenon is not exclusive to the United States, either. And, it's not new, only amplified in recent years. The International Monetary Fund (IMF) produced a white paper on how the global economy might recover, as far back as 2000 ("Globalization and Catching-Up: From Recession to Growth in Transition Economies", IMF, Grzegorz W. Kolodko, 2000).

Recession Fatigue Worst Among Zoomers

The generations most impacted by recession fatigue appear to be Generation Z, or adults aged 18 to 25. As many as 2 in 5 of them say they are not prepared for the economic downturn. Millennials and Gen Xers are doing slightly better, with 30% claiming to be unprepared. The natural outcome will be greater unemployment, some of which is by choice. As Baby Boomers have been retiring and Gen Xers are approaching retirement age, Generation Z was expected to become a greater proportion of th workforce. However, with recession fatigue in play, it could be that the work force will trend older. At this point, many people consider Generation Z to have had the most stressful and uncertain developmental years among all adult generations.

Burnout in the Recession

Often people respond emotionally to situations that are out of their control. This can lead to burnout, as many of them have lost interest in their jobs. This lack of interest, combined with the looming recession could have a snowball effect on the economy. There is no telling how long burnout recovery will take to materialize, as survey respondents appear disinterested in taking the necessary steps to sustain their incomes. We may also see a dramatic shift in the way people earn an income. With the explosion of work from home, many past employees have turned to selling goods and services online. The likelihood of success is low and many will need to return back to work. But, those who are successful could overcome feelings of burnout. With a shift towards burnout recovery, we could also see a recovery from recession fatigue. But without such a shift, we could find ourselves in an even more challenging economic situation in the coming months and years.

Work/Life Balance and Burnout Recovery

Eventually, the natural response among employers will be to create an environment that entices their best people to stay on board and engaged in their work. Part of this could mean a shift towards a culture of work/life balance that can have positive psychological outcomes. With this kind of shift, people may find their way back to gainful employment in jobs that they enjoy, or at least tolerate as a means of sustaining their lifestyles. Additionally, human resources (HR) managers will likely find ways to create healthy work environments, and we could see a burgeoning HR industry as employers scramble to find the best talent to keep their businesses afloat.

What's Next?

The first step towards recovery from recession fatigue is recognizing it for the growing problem it has become. Legislators and the Federal Reserve may take steps to stimulate the economy at that time, which may or may not work. Ultimately, full recovery will depend on a cultural shift back towards a desire to work and earn an income, even when a job feels less than ideal.