Hiring During a Recession: Tips for Talent Manager For Successful Recruitment

Cash crunches, market share fluctuations, redundancies, and plummeting demand for products as a result of the COVID-19 outbreak became a deadly cocktail for the global markets. So, how does hiring during a recession or potential economic downturn actually work for recruiters?

India has entered into a technical recession for the first time in history as the economy shrank 7.3% in 2020-21. History has evidently shown that the world encounters a recession every 10 to 12 years, with worsening circumstances after each phase. A Chief Content Officer, Matt Charney, said, ‘it is not a matter of if but when.’

Udit Misra, a journalist for The Indian Express, explains the recession period: “When a recessionary phase sustains for long enough, it is called a recession. In other words, when the GDP contracts for a long enough period, the economy is said to be in a recession ”, he says.

This decade has brought on a series of negative news about the Indian economy. The World Bank projected a decline of 2.8% in the global GDP in the fiscal, which was originally projected to be 4.1% before the economic crises that unfolded as a result of the Russia-Ukraine war.

The unprecedented effect of coronavirus and war on the economy has significantly affected the recruitment industry. This industry has a complex relationship with the economy, as the events that ensue during the recession period shape the actions of the talent recruiters.

Riding out a recession period is strenuous for talent acquisition managers.

It is embedded in human beings to respond to negative news defensively. The fear of recession causes businesses to lay off employees and also institute a hiring freeze. The companies are preparing themselves for the technical recession by laying off their employees due to economic slowdowns.

This brings an influx of candidates for recruiters during the recession, making it challenging to select the right talent for specific roles.

Valuable Tips for Recession Period

As the downturn times can be overwhelming and testing for employers and employees alike, here are a number of tips for talent leaders on how to make the best of recession periods and hire top talents:

Build Up Relationships and Expand Your Networks

Relationship building is a fundamental element of recruitment. The whole process of recruitment revolves around building relationships between the recruiter and clients. Positive relationship as a bridge of connection between talent leader, hiring manager, and the potential candidates.

During the economic slump, the market is streamed with candidates, and the talent leaders get spoiled with choices of talents, thus, making it necessary to filter out top talent by attracting and retaining the candidates. This is where the Talent Acquisition System (TAS) becomes imperative. TAS keeps the recruiter in contact with the active and passive candidates by creating a talent pipeline to refine the hiring process. It is imperative to have a well-integrated and inclusive TAS to have a diverse talent pool; RippleHire’s talent acquisition cloud can help in capturing top talent relevant to your workforce.

When the fear of potential recession sets in as the economy freshly plunges into a state of crisis, it brings an opportunity for the talent managers to build up their networks before the complete on-slaught of economic hardships by utilizing the internal database to identify active and passive candidates. Staying in touch with passive candidates can go a long way. Even though a candidate may not be looking for a job presently, the uncertain time can quickly turn an employee into a job seeker.

Closely Investigate the Changing Dynamics of the Recruitment Industry

The recession causes people to lose their jobs as the economic activities are lowest during this time, causing the demand of the labor market to dip notably. The resulting flux of people looking for employment may sound enticing to the recruiters, but the inability to handle the influx can spin things out of control.

There might be many applications of candidates for a specific role, but not every shoe fits every foot!

The priority of the talent leaders should be hiring candidates for their value and what they will add to the organization instead of being a fit according to the resume details. The recruiters should keep a high standard and not reach for ‘low hanging fruit.’ A practical method in this scenario is data-driven recruitment, which uses data analytics for the procedures of hiring. It helps the recruiter set a benchmark and filter out the talent that fits right for the company's requirements.

Exploit Opportunities Presented by Recession

The times of recession set a successful entrepreneur apart from an unsuccessful one. Where the companies take a defensive stance and dismiss workers in the event of slow commercial activities, the recruiters can use this opportunity to adopt an exploratory technique to grow their businesses.

An aggressive instead of a defensive approach is an appropriate method of pushing through the tough times. It is a strategic risk-taking method of beating the recession. By creating an innovation-driven culture in the workforce, the talent leader plans the long-term goals of the firm and expands its business by hiring new workers.

The former talent leader of Apple, José Cong, said: “Despite the downturn, Apple moved aggressively to hire developer and engineering talent.”

The unfortunate events that occurred at the start of the 21st century in the U.S. presented dire economic conditions, but only strong and opportunistic companies were open to making the most out of those incidents as they decided to expand their talent pool for the future.

Understand and Embrace the change

History is bound to repeat itself. The economy of every country works in a cyclical pattern where recession emerges after every few years, causing the economy to falter. The wounds left behind by the Great Depression are still fresh in mind as global employment dropped by 10%.

A recession directly hits the labor market and consequently brings adverse challenges to the recruitment market as well. Typically the recruitment industry is candidate-driven as recruiters compete to attract and hire top talent. This clearly shifts during the recession due to the increased supply of labor in the market. The baby boomers will increasingly retire, giving way to new and fresh talent.

The pandemic-induced recession has changed the structure of the recruitment market. The new talent is in search of better opportunities with flexible working hours, changing the traditional patterns of work. By realizing the demands of the current market, recruiters can revise their talent acquisition plans. It will require the talent managers to revise their bottom line to align their systems with the short and long-term demands of the market.

Be Aware of The Traps of Recruiting in a Recession

Hiring numerous candidates during a recession is a dream of every talented leader, but it can quickly turn into a nightmare.

The panic and fear of recession force candidates to apply for any available jobs. They forgo the mentality of thinking about the long-term and applying for only ideal jobs. These candidates who seek financial security in the short run tend to be a financial burden for the companies in the long run as they do not add value to the business.

When an organization decides to reduce the workforce to save costs during recessions, they usually downsize by terminating the workers of the talent acquisition department. Working with experienced and skilled recruiters, companies can increase the value of their business during a recession.

Create a Strategic Plan and Budget

The economic downturn unveils a number of opportunities for recruiters in terms of the increased flux of talent in the market and business growth. After the development of a clear vision on how to follow through with the downfall, it is time for the managers to devise a strategic plan.

The recession period crashes the currency, hereby limiting the budget of the talent leaders. They should have the capabilities of managing the talented candidates and hiring additional workforce within a set budget to avoid cash flow problems.

Hiring during a recession period requires time, resources, and proper planning, which is tedious but rewarding. It is vital for talent leaders to plan ahead of potential recession to minimize impact and consistently work through necessary changes during a recession because nearing an end does not guarantee a safe way out.