4 Recruiting Best Practices During a Recession
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With unprecedented levels of job growth and suppressed COVID demand, inflation has been in full swing. Inevitably in a free-market economy a recession will take hold to correct the market. Already, signs are being seen in the marketplace as we hear prospective clients taking the ‘wait-and-see’ approach. The more businesses that adopt this mindset, the greater the likelihood the economy levels off and ultimately sees contraction.
Recession is a normal ebb and flow of a free market economy. Recession acts as a coolant to a hyperinflating economy. Too much inflation or recession have the same effect, squeezing some business and consumers out of the market. As a business, you can be prepared to meet your resource needs with the 4 best practices outlined below.
1. Be aware and prepare
An economic recession is not a matter of if, but when. Signs are building toward recession. Hyper-inflation, lower saving, trillions in stimulus, rising interest rates. Furthermore, statistically speaking the US has been at 'full-employment' (with the exception of the COVID pandemic) since 2018. Full-employment is that which economists say is the lowest possible level unemployment that won't cause inflation, a benchmark of 4-5%. COVID simply delayed an inevitable economic correction and may have increased the size of it when it fully takes hold. Economically, peaks often tend to be matched by corresponding lows before continuing an upward trend. Simply ignoring what’s coming is not the best course of action. Taking a proactive rather than reactive approach will put you one step ahead of your competition. Each week, stay aware of your market trends, look at your competition and industries closely related to yours and try to determine how this may affect your workforce.
2. Be ready to pounce
Recessions are filled with all types of opportunity. Typically, the short-term reaction of business leaders is to quit hiring; wise leaders will continue hiring. Skilled talent that previously wasn't available or in the market before may suddenly be. For example the tech sector, which has acted like a vacuum for talent for the past 15 years and paying above market rates, is currently going through substantial layoffs. Some firms are laying off GREAT talent. Initially this group will be resistant to take the first job available at average market rates. Some, who are flush with cash from a decade plus of economic boom times in the tech sector, will be very selective and may even take as high as a year or longer to find their next job. As the recession continues however, this group will open up more and you need to be ready. The next several years will be a great time to add additional talent to your team that previously may have been “ungetable”.
3. Be willing to pivot
A recession means more candidates looking for work in the market. We've been in a candidate market for several years now. Candidates have been more in control as there have been more jobs available than candidates to work them, causing wage growth, contributing to inflation, etc. When a recession takes hold, the economy stalls, open positions are cancelled, wage growth freezes, and people are laid off. Over time the number of people available and interested in working outnumber the available jobs. This shifts the market an employer market. You’ll need to modify your recruiting practices to monitor your recruiting spend. It may be an ideal time to invest in a flexible recruiting service provider which will allow you to flex on demand.
4. Be prepared to do greater screening
The first people laid off from other firms are typically the lowest performers. Be prepared to shift your recruiting practices and begin to look at candidates with more scrutiny. Applications will likely increase as more people look for jobs. Investing in automated screening tools to help with the application onslaught will be necessary. Update your screening and interview guides and make sure your hiring managers are communicated and trained on the updated processes.
We understand how overwhelming hiring can be, especially during uncertain times. Skywalk Group is an expert and can grow and flex with your needs. Let us and take the weight off your shoulders. The next time you encounter a challenge in recruiting, allow us to provide a solution.
By Adam McCoy