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When the economic crisis hits organizations and companies- they focus on cutting costs and slash hiring and recruitment. However, once the upheaval subsides, hiring becomes the front runner option for the companies.
We can take the period following the 2008 Great Recession as an example when the economic outlook appeared dim. The economy was in recession, and firms and corporations retained only their best and most influential people. But once the situation returned to normal, the smarter companies took advantage of the market and started recruiting again.
History is again repeating itself. Now when the Coronavirus pandemic has spread across the globe, global companies are laying off their employees and not hiring new staff. When the financial condition of an economy degrades, a widespread economic recession hits, and companies and employees face an uncertain future. Work perks decline, layoffs occur, and the relationship between organizations and their employees' strains. External recruiters also face negativity and are affected by a decline in job postings during this time. However, it also brings an opportunity for them.
The expertise of the external recruiters’ is their currency. The recruiters have extensive connections across industries, and as such, they have the advantage to take an even more significant role- of recruiting staff. The recruiters have a bigger picture of the situation and know where the talent pool is. This makes it easier for them to bring in the talent when an organization needs excellent staff after the situation becomes favorable.
To play a more prominent role during an economic instability and keep recruiting on track, recruiters must follow the following things in mind:
- Relationships matter: Recruiters need to maintain a favorable relationship with the industries. These relationships prove useful during a recession hits or when a company experiences a hiring freeze. Both the candidates and companies would look for guidance on how to handle the market situation. As recruiters have a 360 in-depth view of the overall market and can provide strategic advice on how both tackle the situation.
- Help companies make tough decisions: If a company is making more layoffs, they would be seeking to assist in providing career counseling and advice for the employees. In such a time, the recruitment agencies come into play. Additionally, they can do a bit of networking and build connections too. Connections made at this point would become opportunities in the future.
- Direct candidates for contracting work: During a crisis, companies may layoff long-term employees as a cost-cutting measure and look for workers on a contract or temporary basis. As such, being a recruiter, it is essential to counsel and provide candidates who are open to interim positions.
- Weakened employment brands: As significant firms turn to large-scale layoffs, their employment brand and image would dramatically deteriorate. This would bring opportunities for firms that have strengthened their employment brand during this lowdown period. Recruitment firms should focus on these firms during this period.
- Capability to stick ‘out of the box’: Once the downturn is over; a firm should have the ability to emerge if the recruiting budget is maintained adequately. This capability would boost the firm ahead of its competitors that will put you far forward of other firms that have annihilated their recruiting skills. Recruiting firms can bring the pool of talent to the firms during this time to make them more efficient in the field.
- Tight times make one stronger: Surviving during economic instability is tough. It is the test of time for a firm. A firm should focus on its work, engage the best-recruiting tools and approaches to keep the best engaged, streamline processes, and focus on the best strategies to ride the tide.
Recruitment issues that one may face during tough Economic Times:
During an economic downturn, things which earlier were easy to handle in recruiting and talent management become tougher to bear. As such, it is essential to identify these problems and tackle them effectively:
- Hiring freezes: This is the first thing that occurs during an economic instability period. Hiring freezes can ruin a recruiting function.
- Stock options Invaluable: With the stock market fluctuating constantly, stock options become invaluable as a motivator for employees as well as for candidates. As a result, recruiting companies have to re-strategize their sales approach candidates.
- Job security: Economic instability brings insecurity both for the employees as well as the candidates about their job security and their future. The recruiting firms need to re-examine the information about different positions that it lists on their website to make it more compelling for the candidates.
- Increased volume of traffic: Layoffs and unemployment during economic turmoil mean the availability of high-quality people among the ranks of the unemployed. If recruiting firms recruit during tough times, the volume of mediocre and enthusiastic unemployed people will increase. This rush of average candidates would mean the firm will be burdened with a long list of applications, and the firm will have to be more careful in selecting the right talented candidate.
- Relocation issues: Relocation makes everyone cringe at applying for a job. Relocating becomes difficult when people don’t get mortgages or have to sell their homes. This creates a problem for recruiting firms. One good alternative to this can be that recruiting firms focus on getting recent college grads who are open to relocation.
- Less focus on recruiting: During tough times, a manager focuses less on recruiting new people as workload increases with lesser staff at their disposal. The lack of interest in reviewing resumes, conducting interviews, and hiring would mean a dramatically slower average time at the recruiting firm.
- Layoffs: Layoffs are one of the first actions a company initiates during an economic crisis. Although the recruiting firms cannot stop layoffs, they should tune with the PR to ensure that the layoffs don’t ruin the firm’s branding and layoffs by that firm don’t come as a highlighted news the next day.
- Technology budgets: During economic turmoil, budget resources for newer technology would diminish. A recruiting firm needs to make their purchases immediately or be prepared to do with the resources available at their disposal.
- Recruiting budget cuts: An economic turmoil brings budget cuts in an organization, and this budget cut applies to the recruiting firm too. The key to maintaining the budget of a recruiting firm is to build a strong business case highlighting the negative business impacts the budget cut of the recruiting firm would generate. The firm can include split samples to highlight the issue.
An economic turmoil means the candidates and employees are nervous about their job prospects, and the companies and organizations face cutbacks in their present workforce in addition to the uncertainty about future hiring decisions. The recruiter at this time should remain agile and serve both the clients and candidates during this time. This will strengthen their relationships, make them an essential asset, and also bring in dividends down the road. When the hiring market narrows, recruiters need to shift their roles to competent consulting. Become a consultant, someone who can balance advising the organizations on employment needs and also the candidates on how to tackle and approach the job market. This will be a critical commodity in any economic state.