Should you change your hiring plan because of a possible recession?
The headlines feel daunting and weave an ominous tale of uncertainty. Industry leaders are pressing on the brakes with hiring “pauses,” and start-up companies in various industries have seen a cooling period.
With workforce costs being the most expensive line-item on the P&L, leadership commonly struggles with planning for future hiring versus placing payroll on ice. Yet, there’s still work to be done to maintain operations, and being short-staffed unfolds a host of other issues in loss of productivity and reduced revenue opportunities. It’s akin to being in a rowboat with a small leak – bucketing out water as it seeps in simultaneously to balance staying afloat. Eventually the arms tire and the water wins.
Fix it with flexibility
When workforce planning becomes a top priority during uncertain economies, pursuing flexibility is often a way to help stabilise the ship. Recruitment Process Outsourcing (RPO) – particularly project-based solutions – offers just that. Following the 2008 financial crisis, RPO emerged as a powerful and reliable option in a recessional economy, and this positive track record indicates that it can once again serve as the lifeboat for many industries looking to maintain a consistent workforce strategy against the prospect of a downturn.
While it’s tempting to lean on lay-offs and hiring freezes during a period of belt-tightening, the job landscape is different compared to past recessions. Even with a looming recession, a McKinsey survey from July claims that 40% of workers were still thinking of quitting their jobs, succumbing to the great resignation phenomena. Who really quits a job with a recessional outlook lurking? People who are confident in the job market, in their skills, and in the fact that hiring has remained steady.
It's not without good cause. In many ways, competition for talent has never been so intense. Our reliance on technology in all industries is undeniable – with most companies still vying for talented IT and engineering professionals that are hard to come by. The labour shortage across the board has rocked industries even during record job creation and a return to the previously historically low pre-pandemic unemployment levels.
A recent Forbes article by Peter Bendor-Samuel, founder of leading industry research firm, The Everest Group, proposed that “companies that lay off staff members or fail to keep hiring during a recession will put themselves in a very difficult situation. I believe that laying off any critical resources will prove to be a mistake a company would regret within six months.”
Bendor-Samuel remarks that while demand for skills may relax for a brief period during a recession, it will return rather quickly. Companies that abruptly limit or downsize their hiring will be at a significant disadvantage once the economy stabilises. An on-demand RPO solution empowers talent acquisition teams to easily scale hiring up and down depending on the organisation’s needs and circumstances.
Don’t panic – prepare
Business leaders are preparing for what lies ahead amidst the ever-changing economic signs and new daily developments. Understand that you have options at your fingertips to help plan for any changes to your organisation’s objectives that could impact headcount. Trust in the process, and prepare for a rainy recession day by:
Connecting with experts
Enlist the help of an expert to assess your current workforce and build a plan for sustained growth or movement. Determine through historical hiring trends and outside industry factors and influencers what your business will require for successful operation and plan for the talent you will need to meet those objectives.
Hiring right the first time
Save costs in turnover and mismatched hires by hiring right the first time through a seasoned provider. Your RPO provider possesses a network of talent on-demand with access to the skillsets you require for open roles and to fill in gaps where needed. Don’t pluck a needle from a haystack; your RPO team knows where the needles are hidden already.
Build a workforce that adheres to compliance and regulatory concerns across geographies. This is especially important in today’s globalised market. The remote world has opened the pipeline to new talent, but also to some risk as well with legal and finance implications. RPO teams are educated to know and mitigate those risks.
Embracing the short-term
Satisfy your project-based initiatives with talented teams delivered to you on short notice, within budget, and on your terms with an RPO solution – or more specifically a Resource Augmentation solution. A top reason that companies shy away from working with a third-party talent provider are the costs associated with long-term contractual obligations. For example, our Project RPO solution gives you access to all the benefits of flexible talent sourcing, at a reasonable cost structure that you can plan for.
Discovering the best of both worlds
Blend the benefits of permanent and contingent talent for the best of both options – the top-quality hires that provide organisational consistency and guidance within the company vision, and the top contractual talent that prefer a more flexible employment lifestyle but are experts in the roles that you need for a limited engagement.
We’ve studied the effects of economic recessions since post-War War I and have found that, while there are many predictable characteristics attributed to each one, no two recessions (or recoveries) were exactly alike. With today’s outsourced talent acquisition solution efficiencies, coupled with the technological advancements that such programmes have built-in, organisations who work with a trusted provider will be at an advantage should the hot labour market continue to cool and important talent decisions need to be made.
Learn more about our range of permanent and contingent recruitment solutions here.