March 24, 2023
How will Silicon Valley Bank’s failure impact candidate sentiment? Lessons from the Great Recession.
Silicon Valley Bank’s failure is a recession-era job-seeker’s worst fear. With recent economic concerns, candidate priorities have shifted towards the practical. They are looking for stability, job security, and competitive pay – rather than meaning, purpose, or personal fulfillment.
Normally, that means a shift in interest from historically riskier bets (like startups or growth-stage companies) to historically safer institutions (like banks, insurance, or manufacturing).
However, to see a major banking institution fail, in a matter of days, throws a wrench in that paradigm. If a top 20 bank is not just at risk of layoffs but at risk to fail entirely, is any company safe? Is any industry?
In assessing how SVB’s failure will change how candidates view companies, it is useful to look back to lessons from the bank failures of 2008 and 2009. Here are a few lessons from the Great Recession:
- The Banking Industry’s Brand Bounced Back: Though banks came under PR fire, their status as desirable, stable-seeming employers came back relatively quickly. This might suggest that SVB’s failure will not dramatically alter candidate views of the industry, at least not long-term.
- However, Winners & Losers Emerged: When candidate scrutiny is high, individual employer brands can change. The banks that kept recruiting and did not lay the most people off came out on top; those the recession devastated are still struggling today. SVB’s failure will cause candidates to scrutinize companies’ actions in the present. And, they’ll remember them well into the future.
- Promises Taken with a Grain of Salt: Stability is a staple value proposition of banks. SVB’s failure, like those in 2008 and 2009, will likely increase candidate skepticism of company promises. Employers will need to back up what they put forward.