Hiring in a downturn. Here's how your company can prepare
A guide to setting up a winning hiring plan that will ensure your organization emerges from the downturn we now face as a winner. Here's a hint, don't take your foot off the gas!
How will the downturn affect businesses?
As we wade into these unknown waters, we know that one thing is for sure - we will see a contraction in the market that is going to likely affect every business, and have a knock-on effect in pausing or cancelling business strategies that had been previously planned for. Just as we thought we had recovered from the challenges of 2008, another recession could be facing us again - however, this time it’s for a very different reason. Whereas this time, we aren’t being penalised for bad behaviour and improper business strategy, the appearance of COVID19 runs the possibility of causing similar credit limiting issues in markets, that will hurt businesses uniformly.
The primary effect that businesses will feel is lowered customer confidence sourced from a reduction in both the willingness and ability to spend due to forced quarantines, shuttered businesses and also job insecurity. Any reduction in purchase intent will naturally lead to lower cash velocity, and a contraction of the credit markets. Whilst different to 2008 in the cause, the effect is likely to be the same - credit drying up, businesses shutting and state intervention - a likely candidate for recession.
How is the downturn affecting hiring?
Naturally, the first thing for businesses to do in these scenarios is to prepare for a tornado - collect valuable resources, batten down the hatches, and ride the storm out; dealing with the damages when they emerge from the bunker. This knee-jerk reaction will most likely be translated to businesses via an instant freeze on mid to long term strategies, redundancies for expensive or low-performing employees and a restriction or complete cancellation in spending on marketing, innovation and M&A activities.
According to a recent report from Bain & Company, companies that reacted with a short-term strategy focused on cost cutting and contraction suffered nearly zero CAGR performance in the decade after the recession ended, with those who quickly reacted and refocused initiatives effectively saw a consistent CAGR of 13%. It’s clear that winners are poised for victory just as the race starts - with them following a few key concepts that others have utilized in the past - a speedy reaction that is focused on maintaining core businesses, whilst continuing to invest in innovation, sales and marketing, and if possible, extend and grow market penetration via hiring and M&A activity.
How should hiring teams prepare?
1) Having a long term viewpoint will set you up for success, especially as you know this will pass and hiring will begin again. By being ready, you will hit the ground running when the floodgates reopen.
2) At this point, the best way to prepare is to keep your talent and expertise pipeline open & active - there are alot of people out there who want to talk to you! Failing to keep them engaged will cause them to forget all about you and end up working for your competition.
3) Have conversations with as many people in your pipeline as possible - they are free to have, and building these connections now will help you create your shortlist when hiring is ready to start again.
Keep a high share of mind
1) Understand that people are nervous and the marketplace is jittery - grow your brand mindshare through positive marketing and communications. Continuing to build a pipeline will give the market a sense that your business is secure.
2) Take a stand on your business's hiring approach to being a part of the solution, not a problem - be a thought leader in this space.
3) People are looking for safety - being a trusted & safe north star in these times will build not only brand loyalty, but will help you position your organization as a leader in the hiring ecosystem.
Be efficient...and creative!
1) A winning strategy is to focus on supporting and growing core areas of your business - make sure that you help maintain any hiring or expertise needs there. Great hires bring profit, and now is the time when you need to make great hires.
2) People are at home more than ever now - be creative with your approach and leverage unique and new communication channels to reach them. This also means there is more time for them to speak with you, which is good when scheduling interviews. With tight budgets, you will need to optimize your spend to low cost, high performance channels - think outside of the box! Don’t just rely on traditional channels like recruiting agencies. 6-figure fees should be out of the question when you are fighting to avoid layoffs.
How can you achieve this today?
Define your company position on how you are part of the solution during these times - make it known far and wide that your organization has no intention of slowing down and leverage every channel at your disposal to keep prospective candidates engaged in your process, even when that process is just networking for future needs. Whilst this sounds like a challenge in the morass of existing unvetted channels, at The Suite, our job marketplace for companies has unique networking features that will have you covered. By leveraging this feature, companies can engage directly with our high powered network free of charge, helping you build and maintain your pipeline no matter the circumstance.
George is the CEO & Co-Founder of The Suite. He founded The Suite in order to fundamentally change the way executives manage their careers. Prior to founding The Suite in 2019, George spent several years in the executive recruiting space where he was fortunate enough to advise some of the world's leading VC & PE backed businesses on talent.