The US Market crashed this Monday. It was surprising but also somewhat expected, as some indicators have shown the economy was heading in that direction.
An economic recession is happening, again, and it’s important to be aware because it affects anyone, allowing you to adapt to the changing situation.
Unemployment rates in the US are surging. GDP has declined for two consecutive quarters. Consumer spending is decreasing, and …, well, I will stop here.
I’m not going into the details of economic aspects since I’m not an expert.
The point is, that recessions will also impact designers. I will share what usually happens, the impact on the design industry, and how we can prepare ourselves.
Let’s get ready.
Impact on the Design Industry
First, let’s talk about the impact on our industry.
Companies’ Revenue Decrease
In a slower economy, the revenue of companies and startups usually decreases. They fail to meet previous target estimations, face higher churn rates, and see their existing customers looking for more affordable solutions.
This often leads to a decline in stock prices. Investors may stop investing, withdraw their money, and seek better alternatives.
Budget Cuts
Decreased revenue leads to budget cuts. Unfortunately, the design department is often one of the first to be affected. Companies typically stop working on unpromising projects.
This has a domino effect, resulting in fewer projects and less demand overall in the market.
Shift in Demand
Budget cuts will force the company to prioritize only what matters. If they are not yet profitable, they need to stretch their remaining cash as long as possible, prioritizing efficiency.
Projects need to generate revenue quickly. Companies will evaluate the ROI of every initiative.
More Layoffs
Sadly, layoffs will continue. More of our friends will display the ‘Open to Work’ badge on their LinkedIn profiles. Startups will cut their budget and slow down hiring.
Designers Flooding the Market
Because of the layoffs, finding jobs will become more challenging. Every design job posting will attract hundreds of applicants. Additionally, in the freelance market, designers will compete with each other, leading to a price war. Supply over demand.
Trend on AI Design Solutions
AI also plays a significant role in reducing the overall demand for designers. Designers who are slow to adapt will be most affected. AI can eliminate tasks typically done by juniors, such as creating quick concepts and automating repetitive work.
AI tools enable anyone who learns to use them to manipulate images and generate concept designs.
So, What To Do
A famous quote says there is always a sun after the dark. In fact, some of the best startups and inventions were founded during difficult times. This recession is no different.
Here are some things that you can do to navigate through it.
Diversifying Skillsets to Stay Competitive
Strengthening skills should be the first strategy in a recession. Learn different skills that can help you succeed in your current role. Your skills are the ultimate assets you can rely on - something no one can take from you.
It’s already common for designers to wear many hats. Beyond their main role, they often handle copywriting, front-end development, and marketing graphics, depending on the company’s needs. Don’t complain - embrace it as a challenge.
If you are currently freelancing or self-employed, seek out more challenging projects or create your opportunities by working on personal projects like writing content, designing templates, or developing your own products.
Learn to utilize AI
AI is not going to replace you - unless you are slow to adapt. Think of AI as a copilot. You are the pilot, the mastermind, guiding what the AI does.
If you’re doing repetitive work, AI might take over those tasks. Instead, learn to use AI to enhance your work.
For example, AI has become a key part of my workflow. ChatGPT is one of the first apps I open after turning on my computer.
Some use cases include:
Writing and improving my product copy
Brainstorm ideas
Generating images
Etc
Learn how to use AI through platforms like YouTube, Skillshare, or other sites.
Saving for Emergency Funds
Next is to improve your finances. Having funds for rainy days should always be a top priority. It’s more important than buying fancy gadgets or even investing in the financial market.
Aim to save at least three months’ worth of your monthly expenses as a buffer. Keep this money in a place where you can liquidate it quickly when needed.
Don’t put it on Bitcoin or Stocks.
Cut Unnecessary Subscription
Stop unnecessary online subscriptions that you haven’t used in the last few weeks. People are often surprised by how many services they are still paying for but do not actively use it.
Check your App Store settings to see what you can cancel.
Conclusion
Recession is difficult for everyone. I hope this post has given you some insights into how can navigate these challenges. Remember, we are all in this together. Stay resilient, keep learning, and continue to adapt.
Thanks.