There is no shortage of news about the economic downturn and the subsequent fallout, both in the marketplace in general and within HR departments in particular. Attend any conference, recruiters’ networking event, or local SHRM meeting and you will see these concerns on the minds of recruiting professionals across the country.
What is the proper response for those of us involved in talent acquisition? What are the strategic things we should be doing to deal with today’s hiring needs and prepare for the future? Just as great investors like Warren Buffett use downturns to their advantage, there are specific things great companies are doing to capitalize on the current marketplace.
Before we look at four of these, let’s first acknowledge that we cannot paint the entire talent market with the same broad brush. In many industry sectors, like healthcare and energy, and in many geographic regions, like Texas, talent is as difficult to find as ever. Recession or not, these areas will continue to be on the front lines of the war for talent. Surveys we do at Novotus, as well as other industry information, clearly show areas where hiring is continuing to accelerate and needed talent is in extremely short supply.
But for the moment, assuming you work in a region or industry that has slowed, let’s review some critical things that you should consider right now with your talent acquisition teams.
First, and most basic, recognize that the market will indeed turn around. It doesn’t take an economics or history degree, or years of business savvy, to understand this theoretically. But knowing something in theory is not enough. Most investors know in theory that down markets are a great time to buy, but they often lack a strategy or adequate courage to seize the opportunity. It takes strong recruiting leadership within a company to implement effective strategies in a softer talent marketplace.
Now is certainly the time to develop that strategy and sell its importance within the organization. Budget protection is vital. In a down market everyone wrestles for dollars. Sales and marketing may be looking for some of your recruiting funds to boost revenues now, and certainly finance will want some to improve the bottom line. Their easy argument is that, well, since hiring is down you obviously don’t need the money. Your only defense will be a solid, well-researched business case based on short-, medium- and long-term company needs. All too frequently, lack of such a plan results in short-term cuts that carry long-term penalties.
Have no illusions, scaling back now will not work to your advantage. Even when the economy recovers, finding good talent will become increasingly difficult. Demographics alone will ensure that. We review this problem in our free white paper, Talent Mirage.
Second, tighten your belt so you can spend effectively where needed and still meet corporate cost reduction goals. Now is the time to aggressively eliminate waste and increase efficiency. Analyze your recruiting metrics, or implement an effective metrics program, to discover opportunities for improvement. If you haven’t done this before, start with Staffing.org’s Benchmark Report Look for:
- Duplicate spends on job boards that produce the same candidates
- Process improvements that steamline employment processing
- Technology that improves candidate sourcing and saves recruiters' time
If you use outside vendors to assist in recruiting there may be room for improvement there as well, especially if a portion of your spend is on contingency recruiting fees. Vendors can be very helpful in a challenging market by allowing you to manage hiring spikes without adding in-house staff. But using contingency recruiters who charge 20%- 30% of a candidate’s salary is inefficient. RPO companies provide better hiring results at costs that are normally close to your internal hiring costs, and at minimum, represent a 50%-60% savings over contingency recruiters.
Third, make a case in your budget for building your employment brand. This is classic contrarian recruiting. Aggressive brands can reap extra profits when the crowd becomes defensive, to invoke Buffet again.
Fourth, use these times to build up your talent community. Great candidates possessing rare skill sets, who might normally be passive and hard to find, may be victims of corporate downsizings. These are the candidates you were desperate to find yesterday, and will be anxious to employ tomorrow.
Even if they are cautious and reluctant to move, and even if you do not have open head count, now is an excellent time to introduce yourself and being these individuals into your talent community. Recruiting passives takes time. Start a relationship now when people are worried about their future. Attractive candidates may change jobs or move to a new city before you need them, but they will most likely keep the same personal email address. Tomorrow, when your circumstances improve, you will have a relationship to build on and an open door to walk through.