Talent Acquisition in a Recession

Business leaders, human resource managers and others involved in talent acquisition may be in for a challenging time. Some economists are predicting a potential recession in the next few years and many are trying to figure out how their business should respond to this possibility and focus on talent acquisition and retention now.

Over the summer of 2022, the economic debate about a recession raged. Later in the fall of 2022, the inflation rate stood at 7.7%. Continued tech industry layoffs may have been the first signal of more cuts by companies looking to save costs. This can lead to freezes in hiring and fewer openings. Combined with that development, companies still hiring will need to work hard identifying the best candidates not only of the existing pool of applicants, but also the recently laid off prospects. It would be smart to act now to prepare for tougher times in talent acquisition and fortify your existing workforce so you retain your best employees who are already nervous about your plans for them. To survive and thrive in a recession, here are some hard realities you’ll need to plan for and prepare your company to weather.

Hesitation to change jobs:

If a recession does land, recruiting will become a challenge. People will resist or be wary of leaving their current position, even if it does not thrill them, for the unknown one you are offering. If layoffs continue to expand into more industries, a candidate’s first instinct will be to dig in where they are and survive the cycle.

However, encouraging the best candidates to switch in tough economic times is not impossible. Right sizing your talent acquisition strategy will help keep your focus on the company’s top priority positional needs. Addressing your candidate’s main issues about the move with incentives and other creative options goes a long way to overcoming their resistance and getting them to commit. For example, if they are worried about being fired first since they are the most recent hire at the company, remind them the senior or top priority nature of the position reinforces their job security. Or, If they are not local and share concerns about relocating, working to see if a remote or hybrid work schedule can be implemented could make the difference.

There is always a way if both sides are properly motivated to make it work. For instance, high quality hires may also have multiple offers to consider even in a recession. Their tendency will be to select the one that offers them the most flexibility and aligns best with their needs. Showing them your company can be creative, flexible and trustworthy will give you the edge.

Many Applicants, Few Good Candidates:

As the economy dips, people will lost their jobs and not enough jobs will be available for all of them to land a new one, at least quickly. As a human resource manager or business leader, it is important to understand the vetting part of your talent acquisition process will determine how well you can identify the best candidates. Finding the gems will take more time and effort in this environment. It is also smart to look at transferable skills as one indicator; your company wants to find people who can come in, integrate smoothly and start producing value quickly. Your process needs to help elevate those type of candidate needles from the applicant haystack.

Talent Acquisition Funding Cuts:

If less job openings are available or companies decide to streamline hiring during a recession, this will impact their ability to find quality talent. It is usually one of the first areas to see impact from an economic downturn and an easy answer for management to see cost savings. Unfortunately, that is short sighted and can cause problems in the short and long terms. This includes hiring freezes which again can be one of the initial reactions by management to recessionary pressures.

Recessions or other economic downturns should be viewed as an opportunity as well as a challenge. Change your approach beyond the normal applicant search, vetting, hiring, and onboarding. Proposing skill gap analysis for internal usage to help the company discover the missing skills they need to prioritize is crucial. You’ll likely learn the existing workforce has more skills than was understood and can be utilized to fill gaps. This aids your talent retention efforts which are important as well.

What Will Happen?

While a recession may be coming, the future of talent acquisition remains hopeful. The U.S. Bureau of Labor Statistics announced today an addition of 311,000 jobs in the February 2023 report, meaning companies are still hiring despite the mixed economic conditions. That is good news, but it always pays off to be prepared for every situation. Please contact us for assistance with workforce and organizational development to strengthen your company for whatever comes next.