Recruiting During an Economic Downturn

When economic downturns hit, the knee-jerk reaction is to cut costs and cease hiring. Strategic goals shift from thrive to survive. But, let’s use history as our guide for a moment. In the first few months after the slump recedes, hiring quickly becomes the top priority.

We witnessed this in full force after the 2008 GFC, where the smarter, more progressive and nimbler companies quickly cleaned house, and then assessed what skills would be required once in the recovery and beyond. These companies took advantage of the volume and quality of candidates in the market and began hiring for the future. By early 2009, the war on talent was once again in full swing. History will again repeat itself.

Already, many of our clients are running into staffing issues. Whether it be due to travel restrictions, the fact that they have just made their entire internal recruitment team redundant, or from being bombarded with 500+ applications candidates to a vacancy they posted on Seek. These problems will only get worse.  

Of course, any organisation that is faced with the heart-breaking prospect of downsizing would find it hard to even think about hiring right now. But whatever happens, the company’s that understand the opportunity in retaining and hiring staff will have the upper hand in their market in the years to come.

Most organisations react to hiring situations as emergencies, which explain why it is so often done poorly. We have found that many companies base their hiring decisions primarily on interview performance and pay little attention to reference checks, psychometric testing, cognitive testing and other competency-based assessment tools.

What we have found is this: Even though there is a global consensus that hiring good people during a downturn results in a highly competitive advantage in the recovery, there are only a small handful of companies that are willing to take the risk and actually do well in the hiring process.

Companies need to look at the challenges facing them more seriously. Stop treating recruitment as a big surprise and start approaching it from a precise, premeditated, and unbiased point of view. Develop best practices (or revamp the hiring process), educate line managers on effective hiring strategies and ensure HR provide the right support at the right time.

Let us also not forget the diversity targets for nationality, gender, experience etc that most organisations committed to prior to Covid-19. Each one of our Clients were vying to create truly diverse workplaces through proactive hiring strategies. There has never been a better time to put these plans in place.

Companies can and must do better at looking at the bigger picture during times of crisis or downturn. Our hope is that organisations will start to set the bar higher, re-evaluate their recruitment processes, and make smarter, more strategic decisions when it comes to recruitment.