Adapting Your Hiring Strategy for a Down Economy

More Talent, Less Competition

Job security was once a given in the US and many European countries, but since the late 1970s, mass layoffs have become more common. The 2000 dot-com bubble burst, the Great Recession, and the pandemic each caused significant job losses and slowed hiring to a crawl. In April 2020, US unemployment hit a record 14.7%. Post-pandemic, remote work and automation trends surged, reshuffling the workforce and leading to the Great Resignation in 2021, where 47.8 million workers voluntarily left their jobs.

Now, recruiters and hiring managers face soaring inflation, recession fears, and labor shortages. Despite these challenges, finding and retaining top talent remains crucial. So, how can you adapt your hiring strategy to recruit successfully in a down economy?

How a Down Economy Affects Hiring

In tough economic times, talent acquisition is often the first area to experience cuts. Hiring new team members is costly, and businesses prioritize employee retention over new hires. Layoffs can become a reality, and although we're not in a recession yet, economic apprehension is high with inflation at 3.4%.

Despite this, job openings have outnumbered unemployed workers, although this trend may change. With unemployment back to pre-pandemic levels and job vacancies declining, recruiting teams face a challenging road ahead.

Challenges of Recruiting in a Down Economy

Recruiting during an economic downturn is no simple feat. Layoffs can be a tough reality, impacting not only those who lose their jobs but also the morale of remaining employees. Hiring freezes add another layer of difficulty, stalling efforts to bring in new talent when it's needed most.

Budget cuts make it even harder to attract top candidates, while economic uncertainty can lead to an overwhelming number of applications, often of uneven quality. Additionally, relocation concerns become more pronounced, with many candidates hesitant to move due to the unstable economy. In these times, emphasizing job stability becomes crucial as potential hires seek assurance and security.

Why the Cost of Job Vacancy Matters

Leaving a position unfilled can seem like a cost-saving measure, but it often leads to productivity and revenue losses, project delays, and decreased employee morale. Calculating the cost of vacancy helps optimize recruitment strategies and highlights the true impact of unfilled roles.

The cost of vacancy is a figure expressing the dollars lost due to leaving a job position unfilled. These costs are often hidden in inefficiency, training hours, knowledge loss, and further attrition from team members taking on more work.

Advantages of Recruiting in a Down Economy

Yes, recruiting during an economic downturn can be challenging, but it also has its upsides. Here are some advantages to consider:

1. Gain an Edge Over Competitors: Top talent may be more accessible as other companies cut back.
2. Focus on Sourcing: Use downtimes to build a strong talent pool and reconnect with passive candidates.
3. Build an Impressive Employer Brand: Hiring during tough times can enhance your reputation as an industry leader.
4. Increase Team Morale: New hires during downturns appreciate their value, boosting morale and productivity.
5. Position for Growth: Investing in talent during downturns can set your company up for future success.

Strategies for Recruiting in a Down Economy

To successfully recruit during an economic downturn, adopting a proactive and strategic approach is crucial. Focus on filling high-impact roles that deliver the most value to your organization. It's essential to think long-term, planning for the future while addressing immediate needs.

Building a strong talent pool can make all the difference; keeping your pipeline warm and investing in a good applicant tracking system will streamline your efforts. Offering an appealing work environment with competitive benefits and aligning with candidates' career goals can help attract top talent. Acting fast in the hiring process and being inclusive by considering unconventional candidates with transferable skills are also key strategies.

Using data to make informed hiring decisions, being transparent about salary expectations, and preparing to handle a high volume of applications efficiently will further enhance your recruitment process. Proactively sourcing talent before job openings arise, upskilling during downtimes, and leveraging technology can significantly improve candidate experiences and outcomes.

Recruiting during an economic downturn can be challenging, but with the right strategies, you can attract, hire, and retain top talent.

For more in-depth information and practical formulas you can implement right away, download our white paper, "Hiring in a Down Economy."