Hey, I was wondering if any of the older designers here could share their experiences on what it’s like to work in ID during a recession. I was still in school the last time the economy went south, so I watched from the sideline. How did our industry respond? How were you impacted by the recession? I’d imagine smaller design shops would have to go under and the bigger corps might trim their internal design departments, but I’d love to hear some first hand experience.
The first one (dotcom crash) we all took a 50% paycut and the boss didn’t pay himself anything.
The second one (housing implosion) we all took a 10% paycut and the consumer/home marketing and sales teams were gutted. Maybe one or two designers or engineers were laid off from product development.
Both cases I was relatively ‘protected’ as I kept my job. Unfortunately this doesn’t always help if you are already laid off, but trying to make yourself as indispensable as possible (nobody is indispensable, really) helps keep you employed when stuff gets bad.
During the dot com crash I was working at a consultancy that was mainly doing work in housewares, medical, and some lifestyle (footwear, watches, sunglasses, snowboard goggles) so we din’t feel it as much. Ot at least I didn’t. I was right out of school and I landed a job mostly drawing all day. As an entry level employee who was happy as a pig in mud to be a workhorse (mixed metaphors alert) I felt somewhat insulated.
During the housing crash I switched from working in-house at Nike to working at frog. I think it was lucky timing as in-house groups seemed to be contracting due to budgets but the work still had to get done so consulting seemed to boom at the time. Sometimes it was easier to get a big NRE (Non-Recurring Expense) through a company than a few headcount even if the cost was about the same. On the backside of that I feel in-house teams and budgets grew and consulting opportunities got leaner, but this coincided with all of the digital tools we have now so a consulting group doesn’t need the overhead that it once had.
Right now it is too early to tell. I think there will be opportunities for gig work, both as contract directly to in-house as well as contract gigs for consulting groups that need to temporarily scale up for a project but don’t want to commit to headcount/facilities. I think it is hard to say where the bottom will be and what the shape of the upward curve of recovery will look like right now. Thankfully we have stayed relatively busy and potentially could still hit our year end target with what is in the pipeline but it feels like people are taking it day by day. I’m trying to stay nimble and mentally flexible while making sure clients are happy with the work and how we do it.
Sean’s advice about being indispensable is really important. Ever boss has two lists, the first are employees they would keep at all cost, and the second are employees that would be the first to go. You want to be on the first list. I had a friend who thought he was indispensable because he had been at a company 15 years plus. He had a lot of institutional knowledge. But he was salty AF, burnt out, the engineers hated working with him because he felt like he knew more, and the marketers felt like he never listened… he was the first to go.
One of my key clients who had a lot of growth over the last 5 years put it well “It is easy to be successful in a bull market, now we will see how good we actually are”… I feel that.
Piggybacking on this point. I’ve always felt that the day you feel like you can’t be fired when things get tough is the day you are fired. Always be pushing to be the dependable, consistent, go-to employee for your experience and expertise has always been my method.
I was in school during Dot Com, and entering the workforce in post-9/11. Had the pleasure of riding the 05-06 highs, staying afloat during the housing crisis, but I didn’t come out unscathed. Company went under in 2011, and scrambled to get something. Luckily, I’d been making moves to get out prior to that so I had a head start. I’ve been at the same place since 2011 and now, we’re feeling the pinch. Being mostly construction and real estate development dependent, we’ll get by for a while. But, in 6, 12, 18 months? Who knows…
Always keep your eyes up and options open. Keep your work up to date, and have a plan when the inevitable happens. If it doesn’t, no sweat. If it does, you’re ready.
I had just landed my first job in May 2008 having graduated in Sept 2007. Inhouse at a medium sized company at a newly formed R&D department.4 new hires and some veterans from other departments. I was pushing to start in May (because I was broke and kinda desperate) while the other 3 started in August after summer vacations. In I think October we got notice that people are getting laid off. Naturally all 4 of us felt scared. I was feeling at least a little secure having started before the other guys, but was still the most junior.
After a few days the R&D boss called all 4 of us into his office at the same time. He said “I went through hell to get this thing off the ground and hire you, no way we are letting you go”. Some week later the veterans - both 10-15 years at that company - packed their things. One engineer who “knew everything” and a GD from some unknown hole who everyone hated working with.
I agree about making yourself indispensable, but also - be social. Interact with people and make sure everyone knows who you are and what you do. Don’t be afraid of friending your colleagues and bosses on facebook and share who you are (in moderation). This also helps with raises and promotions.
To add on to that one, I’d pay attention to the industries that are thriving through this economy. A few ideas:
Pet: pet adoptions are waaaay up and people love spending on toys, beds, and all manner of things for their fur-children.
Juvenile products: will there be a baby boom post isolation? Not sure on this one yet.
Cookware: cooking at home is way up.
Housewares: people want to nest, perfect their shelter-in-place homes, and use the time to get organized.
Architectural: I think it will be a bit bumpy, but post isolation I think workplaces will go through some redesigns. The trend of packing as many people as possible into as small of a place as possible with as little furniture (barriers) as possible will likely not be tenable. Design firms that can jump on this as experts and companies that can make products for this could grow. Look at all the companies making sleaze guards for grocery store check outs. Cubicles might become a thing again (as will flexible hours and shifted schedules most likely)… same for public spaces.
Automotive: no one is buying cars right now. Brand consolidation and failure was likely even before this mess.
Retail: Not sure on this. The past 10 years has seen an explosion in amazing brand owned retail experiences and retail design houses have grown along with the boom. Will this continue or go away? The largest landlord in the US is Westfeild shopping centers. How will they keep tenants? … then again, many retail experiences will need to be redesigned to meet the new reality. How will fast casual restraints change? How will Target. Could be lots of opportunities.
So think about that as you are working on your final student projects and prepping your portfolio for jobs.
Up: dialed-in comfortable home offices, with real or zoom background options.
Up: outdoors gear to get the hell away, from bicycles to tents to camping stoves
Down: commercial almost anything where people gather. fitness clubs for example but sporting events, mass transit, festivals…
On the fence: virtual reality. while it could be considered the ‘ultimate’ way in 2020 to connect with others, I could envision a backlash against it later. Magic Leap just laid off half its staff - that’s AR but still was targeted at consumers.
This is my 4th recession…
I’ll say this, when I was starting out with nothing but a design degree and a few internships, a recession didn’t even register, which was the case in 1991 for me. I was offered a position at my senior show as a junior designer with a manufacturer that I had interned with at while in design school. The company had fresh management and capital for R&D was flush. Times were obliviously good, as I hit the market just as the recession ended.
Literally the week I arrived in Singapore in 1997 to work a contract with the government there, the Asian financial crisis hit and my contract which was iron clad took a 20% hit along with everyone else in the Singaporean workforce. Brutal experience… began to read about economics and global finance in depth to understand why it was now so easy to send a million dollars half way around the world in just a few seconds. George Soros anyone?
In the early 2000’s recession, I had just moved back to Silicon Valley from Singapore. Startups were going crazy and the burn rate on cash spending made everyone’s head spin. High billable rates came to a screeching halt overnight. I started teaching design at a local university and found it stressful to afford the overhead of 3D CAD services as a consultant, which were in high demand back then. I was now realizing that there was a distinct economic difference between Boomer designers and Gen-X designers like myself. Hmmmm?!
The sub-prime mortgage crisis of 2007 hit after I had moved to Shanghai to work a contract with a US manufacturer who had set up shop in one of the economic free zones that were popular then. One year in, over night my client’s electricity costs tripled and the CCP government forced him to spend millions of US$ on injection molding machinery. I came back from a visa run to Japan to find my contract dissolved. I left China without collecting on a US$6000 deposit on my apartment and bailed to Seoul, Korea. Ouch! Left me asking myself, “what IS this Industrial Design profession thing”?
This current merry-go-round we are on now is only just beginning. I think the higher education system in the USA has no idea what is going to hit them in the next 6 months. When I visit https://ismyinternshipcancelled.com/ it certainly looks grim for students looking for internships. I feel for Generation Z as this is not like the recession I graduated into back in 1991. Last I checked, the number of unemployed was just over 11 million. I still hate those service startups that keep popping up like fiver.com, guru.com, upwork.com et al. Those who are just starting out now might only get work through these dubious business models that take your billable rate as a design contractor and give it to the IT guys who are siting back collecting on their algorithms. Veterans like myself have built a network of colleagues, associates and students to ask for help on projects, so I don’t really find myself regularly reviewing portfolios anymore. If I have a resource gap, I just send out a bunch of emails to those I know and have worked with. Designers in my generation have an obligation to hire the next crop of designers getting out of school now. It is painful to not be able to direct to, or hire directly designers seeking their first position out of school. I blame the rise of Asia and the increased cost of healthcare benefits on the market being unaffordable to hire designers full time in the USA. The old standard still exists even in this bleak environment. If you’ve worked an internship while earning your degree, milk those connections again again and again until they hire you…F@#! it is bad out there now! If you survive, and you will, you’ll have a better story to tell than me.
Great recap and stories, I appreciate it.
Lots of good advice here. I worked for a company for 15 years and after the GFC survived through about 6 or more rounds of redundancies. I found that after making superfluous people redundant the next reason to either keep or get rid of someone was their attitude balanced against their work performance, and they dont always hold equally weight. I have seen poorer workers kept above people who just couldn’t do basic socialising.
And sometimes the timing is just really bad.
I was looking for a new challenge and kept my eye out for a couple of years in case a special job came up. Late January this year I started what I thought would be my dream job for the next 10 years. Unfortunately after the first round of redundancies from all the Covid stuff I was then made redundant. I was in a senior position and just shy of my 3 month probation and they couldnt get the government stimulus which meant it was an easy financial call to let me go otherwise they would have had to pay me out more later. Poor timing all around but that’s just the way it is sometimes. I think I will do some more study and design for myself as I don’t think there will be many, if any, opportunities where I currently live for a long time to come.
Late 80s, early 90s I was working 4 jobs (1 being freelance design). I was called a slacker. Today it is referred as the gig economy. Do what you have to do to get by.
Dot bomb/9-11 I was in a consultancy that started in medical and was branching out into research and branding. For some reason they thought the research and branding was the way to go, I left in 2003, started my own thing continuing with the medical. Lean the first year, but I am thankful because we learned to scrimp and save. The next year was banner, I exceeded that yearly income only once since then due to a bonus when another company got sold. But since of the lean year 1, I still have that money from year 2 squirrelled away.
In 2009 I had been corporate for 1 year at a medical device company. I believe we had 14% growth that year. Thank god for boomers getting old and expecting everything for care.
Today I am in the same company but we were bought by a fortune 300 in 2017. 3 divisions. Mine is emergency and acute care. Again, we will get double-digit growth, love them even older boomers. The other 2 divisions are mostly elective procedures. They are tanking and we are burning the couple billion in cash reserves. Unless it keeps the lights on, our capital expenditures are gone, cut by 75%. Bonuses are gone. 401K matching could be gone.
Word of warning, once most of the boomers are dead, medical will tank. Figure 15 years from now will be the peak. Plan accordingly.
Thanks everyone for sharing seriously. All of this info has been super helpful.
I can see automation and the products surrounding it going up in the coming years as companies move to lower the amount of humans they employ as it now seen as a risk.
Main points I’m getting are stay indispensable and nimble.
iab, you make a good point. I never thought about the shift sectors will experience when millennials turn into boomers.
What a wild ride! Glad to hear you made it through it all.
…and have a good attitude, or at least not a crappy attitude, and try to pull people up not bring them down. This is maybe 50% of indispensable! And I would do well to remember that myself.
Me too, easy to slip. You can disagree without being disagreeable
Great point, I hadn’t thought of that iab. Do you think this is due to the sheer size of the Boomer pop compared to Gen X, their desire to stay young and alive at all costs vs Gen X, or both? Interestingly I was reading recently that while the Boomers have more amassed wealth in total as a generation, the per capita wealth is actually lower the Gen X.
Per capita wealth might be driven by where they are in their life. Gen X is now in their 40~50s which is their peak earning years (and savings). Boomers are 60~80. I don’t know what % are in retirement, but undoubtedly a substantial amount. In retirement, their savings will naturally go down as they spend their savings.
I don’t know where medical will be in 15~20 years, but I think there will always be money there. People want to live longer and better. People will always be willing to pay for this.
Back OT: I graduated in a soft market and I’ve worked through a recession. My only advice is the same that I give all the time: if you want to work in design, take any work you can get. We all need to put food on the table, but make sure that you put aside some time every week to work on projects, keep your skills sharp and update your portfolio. If you can get any freelance work, take it. It’s like driving through mud or snow. If you stop, you will stuck. Keep your forward momentum up as high as you can.
Best of luck!
sound advice Ray.
It’s a numbers game. Boomers die, 10% less Xers. Picks back up with Y and Z, but there is 15-20 years of decline. Next, medical inflation has been basically twice that of “normal” inflation for the last 30 years. In the US, over half of all healthcare expenditures are public. Shrinking tax base, increasing cost - that math has been known for 30 years yet nothing is done about it. It will come to a head, 15 years seems about right to me. I wouldn’t want to be in that business. By that time, I’m planning on a 2-bedroom condo with doorman in San Diego, so the point is mute with me.
As for any wish to live longer, average life span is flat. Actually went down a bit in the US due to the opioid crisis. I also don’t care much for generalizing generations.
Massive generalisation here based only on my own assumption and not backed up by data but lifestyle and world exposure of boomers will probably have an impact. Smoking in their earlier years, being in buildings that used asbestos, diet and exercise not being as prevalent as it is now etc.
This will be my first recession as I started university in 2009 so was sheltered from the immediate impact and then graduated in the start-up boom so there were quite a handful of opportunities to be had.
It turns out that those preliminary reports of shelters being cleared out were mostly feel good stories the numbers now say that adoptions overall are trending down.
in general though i do think the pet space is still growing and relatively recession resistant but it is full of over leveraged big players and under capitalized small players so there will be a lot of devastation, there are just also a lot of well positioned business that will be able to capitalize.
the dot com bust took out Pets.com which did shake the industry a bit.
in 2008 we all braced for the impact but it was slow moving and by 2010 you could measure it but it wasn’t a massive tidal wave for us like it was in other places.