“Companies are still confronting this enormous churn and losing people, and they don’t know what to do to hang on to people,” Julia Pollak, chief economist at ZipRecruiter, told the New York Times. “They’re “definitely hanging on to workers for dear life just because they’re so scarce.” 

It’s a concept known as labor hoarding, an economic term for when a company keeps employees rather than letting them go during a recession and finds other ways to cut costs instead. It’s a response to the tight labor market that has plagued U.S. employers for the past two years.

After the layoffs of the coronavirus recession, employees took back power, bargaining for better wages, hours, and working conditions and joining the Great Resignation if their needs weren’t met. The ensuing labor shortage left employers clamoring for workers, giving out record-level raises at the end of 2021 to retain the ones they had. 

But as economists increasingly warn of a recession, the upper hand has seemingly been shifting back to bosses. Fearful of the forecast, some companies have ordered workers back to the office and implemented early layoffs. It’s made some workers question their job security: Nearly 80% fear being laid off if a recession does hit, according to Insight Global’s survey. 

Layoffs that have already happened aren’t as dire as the headlines make them sound, though. Even with the Federal Reserve’s interest rate hikes to curb inflation, which typically translates to higher unemployment, the 3.5% unemployment rate remains at its lowest level in five decades and there were 1.7 job openings for every worker as of September. Workers who have been out of jobs are finding new ones faster than ever. And then there are the employers still holding on to their workers. It’s all a sign that employees are still wielding power.

Labor hoarding could help keep the unemployment rate in check as the Fed continues to hike interest rates, making a recession a little less devastating this time around. But as the NYT notes, the Fed anticipates the unemployment rate to rise to at least 4.4% next year.

And it may be too soon to say whether labor hoarding is actually happening. As Rand Corporation economist Kathryn Edwards tells Axios, workers aren’t as abundant as they were during the height of the Great Resignation, and government data has yet to support evidence of labor hoarding. While some companies are still trying to rectify worker scarcity, she said, they may just be trying to rebalance things.

Besides, we don’t yet know what the severity of a recession will be. While former member of the Federal Reserve Board of Governors Randall Kroszner doesn’t expect a “devastating early-1980s type” of recession, CEO of Roubini Macro Associates Nouriel Roubini predicts a “long and ugly” one.

But if labor hoarding does become the narrative of the next recession, it’s a glimmer of hope for workers that things could be different this time around.