We’ve gone through a turbulent time of inflation and labor shortages, and now worries of a looming economic downturn as the pandemic recovery proceeds. However, some industries are still doing well, while others are going through extremely terrible times and making difficult decisions.
Even the savviest talent management (TA) managers and recruiters may find it challenging to function in this everything-is-weird economy.
Whether or not a recession occurs, having some safety net programs in your hiring strategy can help during a labor market constraint and give your company a competitive edge when it comes time to cut costs.
Since the last recession, companies and active job seekers have realized that recruiting during a downturn is completely different. Numerous companies are keeping an eye on the state of the market, learning from it, and putting innovative hiring methods into action today and in the next.
How does hiring change during a recession?
Economists define a recession as a time when economic activity has significantly decreased. Drops in investment, declining firm earnings, and increased unemployment are common characteristics of recessions. The most recent recession, dubbed the Great Recession in 2007, resulted in a 4% decline in global economic growth and 10% unemployment at its height.
However, corporations can institute employment freezes without a recession. Unemployment rose beyond 14% during the COVID-19 epidemic, outpacing the Great Recession. The hiring of new talent frequently stalls as the economy contracts. Some businesses even start making layoffs. Employer engagement and retention become the primary concerns instead of hiring.
What ought to be avoided during a recession?
In the past, businesses that kept hiring during a downturn benefited from the market. If you can, prioritize hiring new employees during a potential recession since you never know when the most extraordinary talent will become available.
Many renowned businesses were able to use a downturn to their advantage when it came to hiring. At a time when many other businesses were starting to struggle, Hewlett-Packard hired the top personnel by getting the benefit of the engineers who were leaving the shortly US military labs. In the 1970s, Microsoft employed people amid one of the most severe 16-month economic downturns while, at the same time, the company was getting off the ground.
Many businesses must acknowledge the fact that the economy is in a slump, though. Expanding the workforce or continuing operations isn’t always financially feasible.
Harvard Business Review experts found a pattern among businesses that were able to modify their hiring procedures during challenging economic times. According to an analysis of 4,700 businesses throughout the last three recessions, 9% used a “progressive orientation” to emerge from the crises. These businesses did make cuts, but they were deliberate.
In a downturn, how do you recruit?
Take stock first. Take into account the resources you will require now and into the. The following elements are to consider:
Long-term objectives for your company: Can you move swiftly to discover skilled candidates and benefit from a promising job market? What knowledge and abilities will your team require to keep innovating?
Needs for immediate hire which jobs do you presently have available? Is the priority of those available posts high, medium, or low?
With your capacity to identify candidates, you can get more applications during a downturn as people look for new jobs. Is your hiring staff prepared to handle more applications than usual?
There are six methods to employ when hiring during a recession.
- Analyze the abilities needed.
- Meeting with unresponsive candidates
- Form a task force to focus on a specific area of the workforce
- Find resources that make screening simple.
- Hire remotely
- Keep fostering internal talent
A skills gap study can help you find a skill set that your workforce requires but may still need. Skills gap studies can help you prioritize hiring, identify areas for development and training or decide how much money to spend on new partnerships or technologies.
Consider forming a working group dedicated to recruiting the much more promising new workers from the target industries if you’re willing to hire in large quantities.
You might be able to use shifts in the labor market to snag groups of active job seekers, much as HP sought out quality prospects leaving the military.
In a downturn, many business owners can feel they lack the resources to hire. However, recruiting remotely can be successful. Remote workers frequently have lower salaries, are less expensive to hire, and have a broader range of talents.
An available position may be filled internally or externally, depending on the situation. You can train your current employees to tackle new tasks. Take into account which of your existing staff can be guided to successfully transition into new roles because training costs are frequently less expensive than hiring expenditures.
How to Develop a Recession-Resistant Employee Retention Strategy?
When it comes to overseeing human resources, this downturn retaining employees plan will maintain staff morale and force a company to surf against recession.
- Communication is essential.
- Concentrate on Training
- Give Recognition
- Maintain Contact
- Request Feedback
- Take Initiative
- Effective Change Management
- Maintain Your Balance
Organizations must go above and above to establish a work-life balance to retain personnel. Every employee values their time away from the job, and any firm that restricts it in any way, purposefully or unintentionally, would face a significant attrition rate, even in a recession.
Conclusion
Numerous businesses are pausing or preparing for a pay freeze due to high inflation, fluctuating borrowing costs, and other factors. When this happens, the labor market’s demand may shift rapidly in favour of employers.
Take your time with economic booms to fill your personnel pipeline; companies that hire during a downturn can emerge from difficult times better positioned for the future. Consider measures to strengthen employee resilience as you prepare your recruitment policy during a downturn. This can assist in directing your employment process and ensuring that you’re utilizing competent applicants who could currently be looking for a new job.