Workers would take a demotion or pay cut to avoid being laid off

As hiring continues to slow and the unemployment rate inches upward, workers are going to great lengths to ensure they remain employed — even in the face of layoffs. 

According to Resume Builder, nearly a third of workers would be willing to take a demotion or pay cut to avoid being laid off; one in eight workers report they have already made sacrifices to stay with their current company. In other words, employees are willing to negotiate rather than face the job search while being unemployed. Given that the cost of living has gone up by record rates in the last few years, and American savings have fallen from the 2020 peak of 32% of their disposable income to 3.6% this year, it's not surprising that workers are less inclined to roll the dice on today's job market. 

"If I don't have money in my bank account to survive a layoff, I'm going to do whatever it takes to keep my job and benefits, especially if my family is depending on those benefits," says Stacie Haller, chief career advisor at Resume Builder. "But I don't believe that a big percentage of those people make concessions to stay in the long run. They're for another position."

Read more: Breaking down the labor market: What it means for employees and employers

For Haller, it's clear that workers willing to take pay cuts or heavier workloads are likely buying time to find a more stable job without risking being unemployed for months on end. Resume Builder found that one in five workers do not believe they could sustain their current lifestyle if they were laid off, with the biggest concerns being housing and the loss of essential benefits like healthcare. Ultimately, Haller knows workers are just trying to get by, and she even encourages them to negotiate pay and responsibilities with their employers if they are caught in a round of layoffs. 

"If you are hit with a layoff, don't have a knee-jerk reaction," she says. "You might be able to work something out with your employer."

Read more: Why unions are becoming increasingly popular among hourly workers

However, Haller notes that this may not be the best response for everyone. Those in senior positions or who have been with their organization for five or more years are likely to have better severance packages and potentially more savings to fall back on. Haller points out that 70% of their survey respondents were under the age of 44 and made $75,000 or less, underlining why a substantial portion of the total respondents were willing to stay with their current employer. 

"Severance packages these days are typically based on longevity," says Haller. "If you're at a company for 20 years, you could get a decent severance package that lasts until your next job. But if you've worked only one, two or three years at an organization and you get laid off, chances are you might not have a robust package."

Read more: Gen X and millennials would pay higher taxes to access Medicare

Ideally, workers should keep their resumes updated and keep an eye out for job openings in their field, even if they like their current role, explains Haller. As for employers, she advises them to be honest about what is driving layoffs and be willing to hear out employees who wish to stay on. She emphasizes that while today's job market may be favoring employers, the pendulum will swing. 

"Many times, there's a verifiable business reason why a division might be getting laid off — maybe the company is changing its mission or its business model," says Haller. "So be transparent and help employees adjust to whatever their next step might be. Because at some point, the same companies are going to have to attract talent again in the future."