The US and the world economy are on the verge of a recession as we are seeing record inflation numbers closer to 9% affecting the prices of gas, groceries, rent and other essentials in 2022. Recession and inflation are a result of several factors—the pandemic being one of the most major and obvious reasons. While some economists predict that inflation may be nearing its end, the question “Are we headed for a recession?” still persists.
What does a recession mean?
A decline in the economy during which trade and industrial activities are minimal resulting in a reduced GDP over two or more successive quarters is referred to as an economic recession. A recession can last anywhere from a few months to several years. Recession and inflation can result in reduced consumer expenditure, higher unemployment rates, and dramatic changes in the lifestyle of the common man.
What happens in a recession is that most industries are heavily affected by the slowdown in the economy, except a handful of businesses with recession-proof jobs like real estate agents, accountants, financiers, economists, grocery and discount stores, and healthcare providers. Recruitment and management in a retracting economy too are greatly impacted.
The impact of recession on recruitment industry
Like other industries, the impact of recession on recruitment process can be quite volatile and unpredictable. Several companies and businesses close operations as they may not sustain the inflation. It will be hard to retain employees as they are open to jumping to higher-paying jobs. On the other hand, employees will be ready to work overtime, which is more economical than hiring a new candidate for the task. Organizations are obligated to reward loyal employees who are willing to work for longer hours and/or take pay cuts during the recession. It also means there is lesser demand for recruitment and a differently-defined approach to human resource management.
As the current US recession is about to attack the economy, several giants like Apple and Google are slowing down their hiring processes for the next few years to gear up for the drop. Their recruitment focus will largely lie on technical, engineering, and a few other critical roles within the organization.
How to prepare for a recession as a recruiter
The execution of recruitment during recession is even more challenging than usual as it will require an improvised analysis of candidates and their requirements to ensure guaranteed results and high retention rates. Here are a few pointers to keep in mind to reduce the negative impact of recession on recruitment and selection:
- Resume recruitingWhile it may seem like pausing hiring for your organization would save you big bucks, a prolonged pause in recruitment can affect the progress of your company in the long run. Not only will the existing employees face burnout and hinder the productivity of work, but you also risk the opportunity of hiring good talent who may be unemployed at that particular juncture. This also prevents the chance of trying out new strategies and techniques for the success of your business.
- Talent PoolWith unemployment rates soaring high, a job posting would invite an influx of applications of great talent. While it may seem overwhelming to analyze all the applications, the time and energy spent in building the talent pool can be beneficial when the recession is eased.
- Advertise smartlyWhen trying to work with a budget during recession, it is essential to advertise effectively. With a little research, you can identify the best and inexpensive avenues to advertise on that will bring you efficient results. Use the existing talent pool and references, or word-of-mouth to make your hiring worthwhile. Opt for freelancers or outsourcing for cost-effective solutions.
- Offer securityRecession news can cause unrest among employees and have them questioning their safety in the unstable economy. Existing employees as well as the new hires need reassurance that their jobs are not at stake. Small gestures go a long way. Communicate with employees, advise them on dealing with the pain points of inflation, and offer flexibility with factors like timing or working days, without letting it affect workflow. Rewarding loyal and hardworking employees, providing benefits even if as simple as a gift voucher, and other smart temporary strategies help provide employees with the confidence that their jobs are secure. This can also enhance retention rates and the progress in productivity.
- StrategizeTo prevent the adverse effects of recession on employees and in turn on your organization, create a fail-proof plan considering all the possible parameters that may affect work due to recession. Make sure to have several backup plans to protect the goals of your organization. A skills audit will come in handy to help you identify and map skills gaps if any. With so many AI and technological tools available to make work easier, choose suitable programs that will not only make work efficient but also help with your budget. The slowdown provides a good break to analyze and restrategize the company’s game plan based on the new developments. Opt for quality vs quantity when hiring. Look for professionals with experience and versatile resumes who can eliminate the need for multiple job roles and prove cost-effective. It can also open up new avenues for the future of your organization. After the selection process, make sure to confirm the candidate right away. Not only does it prevent the risk of losing good talent but it also assures the candidate of a secure future with the company.
While recession and inflation seem like a risky period for recruitment and human resources, you can make the most of the slowdown and turn around the situation in your favor by hiring the best talent and reassessing the organization’s objectives with a few simple and smart strategies in place. If your organization is looking for the best hires during a recession, HireEazy’s recruitment experts will help you make the best decisions for your organization and deliver top talent, despite the unpredictable economy.