Creates More Person-Job Misfits

During a recession, most companies try to cut costs by laying off several employees at once. Of course, a job market with few jobs and many job seekers can often result in more person-job misfits.

A person-job misfit happens when an applicant is hired for a position for which they do not fit. It can be because of over-qualification or irrelevant skills and experience. Basically, this leads to a mismatch between job seekers and available jobs.

During a recession, companies may focus on hiring individuals with more experience, regardless of their skills and values. This is because companies are less willing to put time and money into training new talent. They would rather have someone who can start off strong.

Additionally, job seekers would be more eager to secure employment, so they would accept jobs that are not a good fit for their skills and experience. This means that they could settle for jobs that do not use their full potential.

Paw Vej
Chief Operating Officer, Financer.com

Transforms Entry-level Applicants from More Experienced Careers

Recessions can wreak havoc on entire industries, and the employees in those industries are going to transition to other spaces that aren’t as affected by economic downturns, even if it means starting over. Someone with ten years of retail experience is going to move on to something in the digital realm because that is where the jobs are going.

If you’re in an industry that is attractive to those leaving a floundering industry, you’re going to have more applications to wade through, and a higher percentage of those applications are going to be filled out by people with little-to-no experience in your sector. You also have to decide whether to take a chance on one or more of those candidates, which can be a big thing to consider.

Brittany Dolin
Co-Founder, Pocketbook Agency

Lowers Overall Likelihood of Hiring

One significant effect is that organizations are less likely to hire new workers due to cost-cutting measures. This means that employers are more selective in choosing candidates and may even place a moratorium on certain types of positions.

Additionally, job seekers may be more cautious during a recession since they may not be sure if their job is secure or not. This can lead to more competition for fewer positions and longer hiring times. Companies are also likely to offer lower salaries than during periods of economic stability, which can lead to job seekers feeling less motivated to apply for jobs.

Brenton Thomas
CEO, Twibi Digital Marketing Agency

Places More Obstacles in Front of Recruiters

In the short term, businesses may lay off existing employees or stop hiring new ones altogether. Additionally, businesses may freeze pay increases or salaries may be reduced because of less demand for products or services by customers and clients.

Recruiters will have a harder time convincing potential candidates that this is an ideal time to join the business when there are no benefits, like increased pay or job security. On the other hand, in the long term, recessions often lead well-positioned organizations to target new markets with innovative solutions by newly hired personnel during economic upturns as they prepare for future growth prospects.

In addition, during times of economic uncertainty, there is less competition among applicants, making it easier for recruiters to select top talent from a larger pool of applicants compared with previous years when the competition was fierce. Astute recruiters can look past general resumes and focus on what makes each applicant unique.

Travis Lindemoen
Managing Director, nexus IT group

Limits an Employer’s Ability to Give Raises

A recession can have a notable effect on recruiting efforts, as businesses struggle to maintain multiple departments with limited financial resources.

An example of this is the inability of many employers to give raises; although it is likely that workers will continue to be recruited, it may be at the same salary as before or even lower sometimes, which reduces the overall money available. This lack of growth potential could further limit the pool of qualified applicants who are willing and able to take on new job opportunities.

Grace He
People and Culture Director, TeamBuilding

Changes Recruiting from One Phase to Another

Although the number of job opportunities may decrease during a recession, the recruiting function remains robust. It alters from trying to find qualified applicants who are looking to change building a talent pipeline for future needs.

Many more talented people who are currently employed are open to a dialogue in an uncertain economy, so if you concentrate your efforts on talent acquisition, you can create a pool of fantastic candidates that you otherwise might not have been able to reach if the economy was strong.

Dave Haney
CEO, Surety Systems, Inc.

Generates a More Helpful Situation

Contrary to what many companies believe, as a veteran recruiter, I contend that one of the best times to recruit is during a recession. Here’s why—during a recession, most companies halt their hiring. By continuing to interview, and possibly hire, during slow economic times sends a clear message to those talking to you that your company is resilient.

In addition, with fewer companies interviewing, you are less likely to get into a bidding war against another firm vying for the same candidate. Also, your chosen candidate will probably not be receiving a counteroffer from their current company.

Obviously, you don’t want to offer them a lower compensation package, but you definitely will not get into a bidding war and have to overpay. Finally, during a recession, many external recruiters may discount their fees in order to get your business. All good reasons to continue recruiting regardless of the economic climate.

Jamie McCann
Executive Recruiter, 3AM Marketing Services

Shifts to Working With Limited Resources

Business owners and leaders are feeling pressure to reduce costs and overhead, leaving recruiters to work with very limited resources, especially as costs continue to increase. As such, the cost of recruiting has gone up significantly, and resources available to recruiters will continue to decrease.

It’s no secret that economic uncertainty impacts recruiting. 2022 was a year of increasing inflation, leaving many companies actively contemplating cutting recruiting resources in order to save costs. This not only slows hiring in different industries, but it also can negatively impact the company’s bottom line.

Yes, recruiting is expensive, but it’s also necessary. The recruiting process sets the tone for a new employee’s entire experience. As a company, you want to present yourself as strong, inclusive and encouraging. Cutting recruiting resources will make your company seem essentially cheap and uninviting, and this deters quality talent from walking through your doors.

David Lewis
CEO and Founder, Monegenix

Increases Talent Quantity, but not Necessarily Quality

The reality is that yes, there’s more talent on the market, but that doesn’t mean there’s more exceptional talent on the market.

The last few years were a candidate’s market, where they were demanding high salaries and expected certain lifestyle accommodations. Many companies had to make hires based on tight budgets and where the market was, which was extraordinarily competitive.

This is a time to really dive in and assess your team’s skills against the business outcomes you seek. If you do not feel you have the best-in-class talent to achieve those outcomes, it’s a good time to network and up-level your talent or invest in upskilling your current team.

Kristine Shine
Founder and CEO, Shine Talent

The post How Does a Recession Affect Recruiting? appeared first on RecruitingDaily.

Incentivizing Existing Employees Instead of Recruiting

Hiring during a recession is certainly more difficult, as employers search for capable and available candidates who often overlook such opportunities while they wait for the economy to pick up again.

An uncommon approach to recruiting in 2023 could be to focus less on job seekers and more on talent retention—by providing better incentives than the competition for current employees, organizations could ensure a steady pool of talent ready for new responsibilities, regardless of the economic climate.

Tasia Duske
CEO, Museum Hack

Focusing on Entry-level

Typically, it is a lot easier to hire people during a recession. Since a lot of businesses want to minimize their costs by cutting down their workforce, it means that there are a lot more candidates than there are open positions. Hence, even if you simply stick with your current recruiting approach, you should be able to pool a significantly greater number of applicants compared to normal.

However, while recruiting talent is easier during a recession, retaining talent is much harder. During this time, there is a lot of movement since people are constantly seeking companies that offer better pay or a better work environment.

To address this, our recruiting strategy for 2023 would be to hire more fresh graduates or candidates with minimal experience. Since not a lot of companies are willing to hire these types of candidates during a recession, we’ll face no shortage of applicants, and we can make sure that they will stick with our company in the long term.

Paw Vej
Chief Operating Officer, Financer.com

Proving Your Company Is Recession-proof

People often transition from one industry to another during economic downturns. They see that certain industries suffer the most during recessions, and on top of that, never bounce back. Lots of people have left print journalism because of declining revenues and resources. Lots of people left the real estate and retail industries during the Great Recession. Many others left the food-and-beverage industry during the throes of the COVID-19 pandemic.

As one industry diminishes in terms of manpower, others show signs of growth. Consumer habits also change a lot during a recession—and many of those changes become permanent, often bolstering entire industries. If you’re in a space that shows signs of being recession-proof, the public is going to notice. Job seekers, in particular, are going to notice—and they’re going to want to apply for jobs at your company. You can use that to your advantage.

Brittany Dolin
Co-Founder, Pocketbook Agency

Viewing Recessions as Opportunities

While some companies are starting layoffs and hiring freezes, others see it as an opportunity to bring in skilled staff members. On the verge of an impending recession, a large number of Silicon Valley businesses are suspending hiring and implementing mass layoffs.

For instance, in a note, Andy Jassy, CEO of Amazon, stated that the layoffs would continue throughout 2023. Tech behemoths like Apple, meanwhile, see the economic downturn as an opportunity. For instance, Apple hired top engineering talent during the economic downturn following 9/11, which allowed the company to introduce the iPhone and iPod in the following years. Business executives must therefore see the recession as an opportunity for long-term growth and act accordingly.

Brian Clark
Founder, United Medical Education

Increasing Digital Marketing and Virtual Tool Usage

It is not necessarily easier to hire during a recession, as there is likely to be more competition for fewer jobs. During a recession, it is important to focus on recruiting the right talent who are driven and have the skills to help your business succeed.

My recruiting strategy in 2023 is to focus more on digital marketing to reach out to a broader candidate pool, and use targeted outreach to find the best talent. Additionally, I will be utilizing virtual recruitment tools to streamline the interview process and enable more efficient decision-making. I will also be leveraging data-driven insights to ensure that my recruiting strategy is aligned with my business goals.

Tawanda Johnson
HR & DEI Consultant, Sporting Smiles

Optimizing the Candidate Experience

The candidate experience will continue to be a deciding factor in competitive hiring. Over the past year, we saw that candidate experience was a critical, deciding factor in the overall success of the recruitment process.

From recruiting to screening to interviewing, providing constant communication, and building a positive candidate experience can make a significant difference in the candidate’s perception of a company and their decision to accept a position.

As the labor market continues to be in turmoil in the coming year, hiring teams will need to build brand-rich candidate experiences that include opportunities to demonstrate their skills through ethical, science-based job previews and/or simulation assessments and offer personalized feedback—as close to real-time as possible—while also providing an opportunity for the candidates to experience what the job is really like.

Eric Sydell
EVP of Innovation, Modern Hire

Leaning into Remote Hires With Diversity and Inclusion

It can be easier to hire during a recession, as there may be a larger pool of unemployed or underemployed individuals looking for work. When there’s a recession, people are more likely to take whatever job they can get—even if it’s not perfect for them or their needs—because they need the money.

This means that companies can find great talent at a lower price point than usual. However, it also depends on the specific industry and job market conditions. Recruiting strategies are constantly evolving and can change depending on economic conditions. We are focusing more on virtual recruiting and remote hiring due to the shift towards remote work. Additionally, we aim to build a diverse and inclusive workforce as part of our recruitment strategy.

Kimberley Tyler-Smith
VP, Strategy & Growth, Resume Worded

Involving the Extended Team in the Process

During a recession, the job candidate pool gets bigger, which is both good and more challenging. An attractive job opening will generate more interest, more candidates and a bigger pile of resumes and cover letters to wade through. You will probably need more people to sift through all of the applicants.

Finding the standouts becomes more labor-intensive, so you will need to devote more resources and personnel to assist you in compiling the best group of candidates. Sometimes, you may need to ask non-managers to help you with that. Call on your top producers to help you, as they know better than anyone else what skills are required to excel at your company. Seek feedback and assistance from them. Hiring during a recession typically calls for more manpower.

Juan Pablo Cappello
Co-Founder & CEO, Nue Life

Finding the Pros and Cons

Yes, it’s a great time for individuals who have taken the plunge to explore something new, such as freelancing or side hustles. This is how startups are born.

Right now, we are seeing Microsoft investing $10 billion in OpenAI but laying off 10,000 staff at the same time. Freelancing opportunities work well during recession times for those who take the brave decision because it pays well and, for the employer, it’s a low-risk strategy.

On the employment side, hiring during a recession can be tricky, and it really depends on the situation. Companies may have limited resources and budgets, so they may have to be more selective in whom they hire. On the other hand, there could be a large pool of qualified applicants, which gives employers plenty of options to choose from. Ultimately, it’s important for companies to carefully assess their needs and figure out what hiring approach works best for them.

Harman Singh
Director, Cyphere

The post Is It Easier to Hire During a Recession? appeared first on RecruitingDaily.