Recruiting is a difficult job. That’s true no matter the state of the economy or the job market. For years, we’ve been doing our best to work effectively in a candidate’s market, in most fields at least. More jobs than people to fill them, and overwhelming pressure from all directions to do it anyway. That might be changing. The ‘r’ word - recession - is being thrown around more frequently these days, by economists, businesspeople, and news reporters alike. So if there is a recession, what would it mean for recruiting? And how can you make sure your recruitment strategy is recession-proof?
The truth of the matter is, nobody knows for sure. Even the statements of economists aren’t carved in stone; they’re projections (well-informed ones, to be sure, but still projections) based on what they see in the market at any given time. It’s also important to remember that recessions can be self-fulfilling. Talk of economic headwinds causes concern, which causes businesses and individuals alike to stop investing, which causes - you guessed it - a recession. There’s a lot to be said for not fueling the concern, and for being as optimistic as possible.
That said, all signs point to a slowdown. Bloomberg updates its ‘risk of US recession’ prediction each month. They closed out 2022 by raising that projection to 70%. That was double the level of risk only six months earlier. And naturally, a recession in the US has impacts far beyond the borders of the country. Earlier in the year, Bloomberg lowered its expectations for global growth to 2.9%, down from a comparatively rosy 4.6% predicted at the beginning of 2022. The dim outlook appears to be hitting the tech sector particularly hard, with over 100,000 employees losing their jobs in the first three weeks of the year.
Combine this with rapidly-rising interest rates, high levels of inflation, shake ups in energy markets and supply chains, and global security concerns. It would be foolish (or at least overly naive) to not take steps to prepare for a downturn.
It’s been over a decade since the beginning of the so-called ‘Great Recession’. A lot of people have entered the recruiting profession since 2008, and therefore there are a lot of recruiters who haven’t worked through a recession. So what happens to recruiters when the economy sputters?
First, the obvious. Hiring freezes and layoffs are common. Unfortunately, people in HR - especially in recruitment - are hit especially hard. Hiring is aggressive in good times, and layoffs can be equally aggressive. It happened in the last recession. Revenue in the staffing sector dropped 28% in 2009, and over a third of employees in staffing lost their jobs.
History seems to be repeating itself. There was a 130% increase in job openings for HR professionals during the pandemic. Those same postings have now dropped by 40%. When Meta announced 11,000 job cuts - including much of its recruiting team - Mark Zuckerberg stated that “Recruiting will be disproportionately affected since we’re planning to hire fewer people next year.”
To be fair, not all companies take this approach. For contrast, consider Zapier. The startup scaled its TA team from 15 to 40 between the fall of 2021 and the spring of 2022. That team helped take the company’s total staff from 550 to over 800 in 2022. Zapier has chosen not to lay off its recruiters. Instead, they’ve taken a look at their skills and interests, and reassigned them to other projects in the company. That way, when the economic tides turn again, they’ll have loyal employees who have even broader knowledge of the company.
Companies like Zapier, sadly, are the exception rather than the rule. That being the case, if the recession is deep and prolonged, the truth of the matter is that some people in recruitment now will likely have to leave the field. For those that remain, you can expect some changes.
The laws of supply and demand have a significant effect on the work of recruiters. In a candidate’s market, such as we’ve experienced in recent years, talent is in short supply. High performers know they’re in demand, and act accordingly. Furthermore, skilled candidates are constantly fielding outreach efforts by recruiters, and they’re (usually) well taken care of by their employer, so their response rate tends to be low. They only connect when an opportunity is of very high interest.
In a recession, the tables turn. In most fields of employment, there are more people laid off and looking for work. Fewer recruiters are reaching out, and there’s more competition for the jobs that are posted. Candidates who ignored you a year ago are now knocking on your door and wanting to connect. Unfortunately, at this point, you may not have anything to offer them.
Hiring managers and clients - internal and external - have other priorities, so it can be tough to get their attention. That can leave recruiters feeling a bit aimless, which is especially tough when they see industry colleagues being laid off.
If the economic clouds on the horizon keep getting darker, we’ve got your back. Here’s a 3-point plan for keeping your recruitment strategy on track, and staying productive, through a downturn.
1: Assess where you are
To figure out where you’re going, you first need to get a sense for your current landscape. This is the time to dig in with your hiring managers, demonstrating your value in a time when the pressure to fill positions quickly has diminished. Have conversations that focus on short term, mid term and long term requirements. Include contingency plans that account for a variety of economic scenarios ranging from optimistic to worst case. Help hiring managers to prioritise potential hires. What skill sets should you continue to source, when those skills might just be more available than before? What hires are essential, and what others are nice-to-haves if business conditions permit? This is also a good time to table new ideas that can help the business weather the storm and still attract the talent you need. Diversify candidate pools, and consider different approaches - flexible staffing and contractors, for example, if the business has more typically hired full time employees.
A recession doesn’t only change the needs and approaches of a business, either. Candidates, too, have different priorities. While there may be an increased supply of talent on the market as a result of layoffs, people who are still employed may actually be more difficult to recruit. When the market is uncertain, and people are losing their jobs, those fortunate enough to be employed may be reluctant to ‘rock the boat’. To these people, predictability and stability is more attractive than opportunity and change. Recruiters and hiring managers alike must factor this potential hesitation into their strategies.
2: Hold what you’ve got
If the economy is affecting your business directly, you’ve got another issue to focus on: retention. Concerns that a company is on shaky footing can cause employees to bolt for what appears to be more solid ground. Work with hiring managers to develop a strategy to make sure your best employees stick around through turbulent times. Messaging is part of the strategy - reassuring employees to the extent you can, while still staying realistic and truthful. Making sure they know they’re valued and appreciated. And listening to them about what they want and need.
Looking outward, don’t neglect your network. This is the time to keep your finger on the pulse of your talent pipeline, active and passive candidates alike. To double down on relationships. When we don’t have something to offer an active candidate who’s reaching out, it’s easier to just not reply. We get it - nobody likes to be the bearer of bad news. But this isn’t the time to cut the lines of communication. It’s just time to change the narrative. Be honest and upfront about the status of vacancies. Then, listen. Understand what they’re looking for, what they’re hoping for. Be a sounding board, and offer any help you’re able to. Connections, maybe, or just a supportive word or two. When the market swings back again - and make no mistake, it will - candidates will remember who was there for them when times were tough.
3: Fix what you can
Reading about the possibility of recession can be disheartening, we know. There is, however, a silver lining to every dark cloud. Even this one.
When things are hectic and busy, problems don’t always get solved. We plough through, dealing with the symptoms, maybe slapping a bandage on here and there, but the underlying issues remain. A slowdown is a perfect time to solve these structural problems.
Chip away at some outdated perceptions that affect your ability to source and recruit. Coach hiring managers to lose the stigma that still - in some cases - affects perceptions of laid off candidates, and those who appear to have a history of job hopping.
Really dig into the HR tech you have at your disposal. Look at what you’ve got in place already to make sure you’re using it to its fullest potential. Your ATS, your application portals, your background screening software, your candidate evaluation platforms. When the pressure’s on and deadlines are tight, we don’t always look for ways that these tools can help us do more and be more efficient. Now is the time. It’s also a good time to look into technologies you don’t yet have. Sure, it can be difficult to pitch an investment in a recession, but investment in HR tech pays dividends. Anything that helps make employees more productive can be a welcome addition in a downturn, even if there’s an initial cost. How much time do you and your colleagues spend on reference and background checks? How much time and money could be saved by implementing background screening software? What other repetitive and time-consuming tasks can be automated, giving you the freedom to focus on more strategic efforts?
Take advantage of the fact that there’s a bit less pressure, and examine your overall hiring process. When things have been hectic, where was the friction? Where did good candidates abandon the process and why? Where were the bottlenecks that slowed things down when you needed them sped up? Take this time to work with your hiring managers to iron out the wrinkles, so that when the pressure’s back on, you’re ready.
A slowdown is a great time to practise better hiring habits, in fact. You can take more time to focus on sourcing and building relationships with candidates, but when there’s a hire to be made, the hiring process shouldn’t slow down. Show high performing candidates that you can move quickly and decisively, even when other companies are dragging their heels.
When those candidates turn into new employees, a recession is also a good time to take another look at your onboarding process. With fewer people being onboarded, you have the opportunity to spend a bit more time on the fundamentals. How do you maintain communication with the candidates before their first day? How do you make sure they’ve got the necessary tools and information on day one? Who do you link new employees with in their first days and weeks to make them feel welcomed and well-oriented?
You’re on the frontline when the company is hiring, so you’re in the best position to spot the opportunities to streamline and improve. To fix problems that have gone wanting, and to champion investments in technology - did we mention background screening software? - that can save time and money now, and when things pick up again.
Like you, we hope that there isn’t a recession. And that if there is one, it’s relatively short and not too deep. But if the economic prognosticators are right, it pays to prepare. As Winston Churchill is credited with saying, never let a crisis go to waste. If there is a recession, look for the opportunities. Demonstrate the value that recruiters bring beyond the basics. Get strategic, and help the company weather the storm. Take the opportunity to Improve the things you can, and emerge a stronger recruiter than ever.