The White Collar Recession Is Real: What Should We Do About It?

Over the last six months we’ve seen much evidence of a white-collar recession. Employees have stopped changing jobs, wage growth is slowing, and research shows that workers with college degrees are the least “in-demand” in the market.

Note this new research by ADP which shows that jobs requiring advanced degrees (“extensive preparation”) are now the slowest-growing part of the job market.

The positive of this is that lower-wage, less educated workers are seeing opportunities.

Demand for food service, healthcare, retail, and manufacturing workers is strong, and in fact their wages are growing at 3-times the growth of white-collar jobs. And this is positive for the US economy, since it reduces income inequality and raises standards of living.

But for those of us who invested heavily in college, graduate school, and other advanced degrees, are we becoming the new “dislocated workforce” of the future? Unfortunately the answer is yes, as hiring slows, we are going to feel it the most.

What Should We (and Employers) Do?

Well the simple answer is “get your act together with AI,” right? Studies show that software engineers who use AI are 26% more productive in weeks, and the same is true for those of us in marketing, research, publishing, and design.

But this shift takes time.

I recently spent an afternoon doing a video-shoot for an online course here in Berkeley, and when I arrived at the location I was astounded to see 6 senior video/audio people, an entire room of lighting, cameras, and audio equipment, and a producer, editor, and other professionals, each of whom were in their 40s or 50s. This massive team of video producers was probably costing the vendor $50,000 or more for the day.

I bet most of this could have been done in a nicely lighted home with an iPhone and some good microphones and a YouTube influencer who knows video editing. I’m not saying the quality would be the same, but I was literally staring at “legacy work” for hours as I sat painstakingly through the interview.

I recently read an article about the career frustrations of Gen-X workers (now in their 40s and 50s) and I had to smile. One of the professionals lamented “I spent 20 years learning about advertising and branding and now a 20-year old Influencer knows more about marketing than me!”

So true, so true.

Let me not belabor the issue, we just have to accept that things have changed. We, as the privileged consultants, analysts, engineers, and professionals in the world, face the same frightening fate which manufacturing workers felt in the 1970s and 1980s. And we have to learn to adapt.

Let me give you my advice.

1/ Let go of your bias and admit you have to reinvent yourself.

I spent a lot of my life cost-justifying the “liberal arts education” I received in the 1970s, and it was a wonderful and important experience. And I continue to maintain that learning about history, science, and philosophy is valuable over time. But what it taught me was “perspective,” not skills. Yes, I learned to read and write and think, but most of my career since has been about reinventing myself regularly.

In the 1980s I learned about computers and IT; in the 1990s I learned about data, marketing, and analytics; in the 2000s I learned about the internet, entrepreneurship, and leadership; and in the ensuing decades I’ve learned about HR, leadership, management, and now AI.

Every decade you have to reinvent yourself, and in every situation your humility is what drives you. Honestly I thought AI was all about LISP programming and the crazy UC Berkeley computer scientists I worked with until three years ago. I woke up like everyone else and “relearned” what I needed to know, watching YouTubes, reading, and listening to podcasts.

If you’re a finance person, marketing professional, engineer, or other white collar worker, you must do the same. Just because you found your slide-rule fun and trendy to use in the 1980s, you had to shift to the HP calculator, spreadsheet, and now AI to stay ahead. If you fail to reinvent, you too can find yourself “thrown aside” for a younger replacement.

This is a humbling experience, but you can learn at any age. Just accept that the world has changed.

And let me add this. Your “seniority” and “experience” may not really matter. In a world of career reinvention, you may have to be a bit of an apprentice again.

2/ Don’t let go of your wisdom, judgement, and maturity.

Despite the amazing skills of some, your experience, judgement, and education does matter. While you learn new tools and skills, it’s ok to fall back on everything you’ve learned before. And that means you, as a white-collar professional, are bigger and more than your “skills.”

Consider the videographer, for example. He or she may learn to use AI and the iPhone like a teenager, but they bring their experience with mood, branding, tone, and language. Your experience as a finance professional, an engineer, a designer, or a leader still matters.

Technical skills are actually the easiest to obtain – it’s the judgement, wisdom, and experience that create value.

Imagine, for example, if every finance department is fully “AI-enabled.” That doesn’t mean every company in an industry will be as profitable – it will be the companies that deeply understand their cost structure, their profitable products, and their business models that outperform. That stuff comes from wisdom, judgement, and experience.

3/ Try new things and throw them away if they fail.

When technology changes quickly there’s a tendency to “wait.” I’ll just wait until the world’s leading “design tool” or “finance tool” comes along, and then I’ll jump in and reskill myself.

Sorry, that’s a recipe for failure. New systems (like Galileo, for example), may be 10 times better than the ones you’ve used before, even though some may fail.

Lotus 1-2-3 was a miraculous invention in the 1980s and it taught us how to integrate spreadsheets, documents, and presentations. (Believe it or not, nobody even considered such integration in the 1980s.) But Lotus went the way of the dinosaur, and those skills were stranded.

The people who jumped into Lotus and learned how to use it quickly migrated to a new generation because they had been playing around. One of my friends at IBM in the 1980s left the mother ship to join Lotus as their very first systems engineer. Yes, he eventually left but later that he became the general manager of Yahoo Asia and then a successful venture capitalist.

If he had worried about Lotus’s future (it was a small company at the time), he never would have succeeded as he did.

I play with lots of new tools all the time, often just to see what’s going on in my domain. This is why I talk with almost every HR tech vendor that approaches us.

4/ Invest in your own passions, energy, and longevity.

It’s not easy to face the demise of your career. It’s painful, frightening, and sometimes depressing.

I spent so many years learning about my old stuff and when I bring it up people roll their eyes and think “this guy is living in the past.” I know I still do it and maybe it’s because of my age.

The solution is to reinvigorate your energy: personal and professional. I spend a lot of time with young HR leaders, young entrepreneurs, and my own young family members. It helps me stay current and excited about the future, because many of the things they do are amazing and unexpected.

Take care of your physical health (go for walks, get up early, go to the gym). This gives you the energy to “reinvent.” I spend every Saturday morning working on my podcasts, largely as a way to “think ahead” as well as summarize the week. These periods of personal reflection and exercise are vital as you reinvent yourself.

This morning I was watching a video of a job fair in Washington DC, watching dozens of middle-aged professionals who had been “DOGE’d” out there looking for work. One woman, a senior research professional in the FDA, was lamenting her need to reinvent her career at the middle of her life. I could see the sadness and fear in her eyes.

She made the comment, “I spent a few days sitting on the couch wondering how I could ever get up again,” but then went to a job fair and suddenly realized there was a huge market of new opportunities. The reporter asked her how she felt, and I could see her eyes flash as she realized “maybe this reinvention will be good for me.”

5/ Uncertainty is ok.

And that leads me to the final point. When your job is gone or you need to reinvent, it’s like jumping off a cliff. You don’t know where you’ll land.

Well that’s perfectly ok. In most cases if you build your skills and reach out into the new world, you will find something new that you never expected. Many blue collar workers who lost factory jobs became carpenters, contractors, teachers, or other careers. We, as the white collar disrupted, may not see the future as clearly as we have in the past.

I can guarantee, however, that new opportunities do await. Just strap in for a ride and positive things will happen ahead.

Additional Information

The Rise of the Superworker: Reinventing Jobs, Careers, and Organizations

The HR Career Navigator

Focus On The Skills Of The Future: Ability To Change.