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Onboarding the right talent is the most important thing for organizational growth in this fiercely competitive world. As the recession looms large over the economy, the dynamics of talent acquisition will change, and the stakes will be higher than before.
Where acquiring the right talent cannot be compromised, recession brings economic uncertainty and forces organizations to either freeze or re-strategize hiring.
Let us look at how recession impacts talent acquisition, its challenges, and tips to overcome them.
The recession impacts almost every business aspect and a nation’s economy. Therefore, despite being an important factor contributing toward growth, hiring is primarily affected as organizations need to cut costs during this time.
According to the statistics by Pew Research Center, during the last recession, which took place in 2007, unemployment rates reached 10.6% worldwide.
Recession causes economic turbulence and impacts talent acquisition because of hiring freezes, lack of strong morale among job seekers, and budgetary constraints. As a result, the focus shifts to existing employees’ retention and engagement, as hiring new members is more expensive than retaining existing ones. It is also challenging to acquire new talent as the job market becomes chaotic with uncertainties.
Businesses can overcome these challenges by taking thoughtful steps and considering a few important things before hiring during a recession.
Employers prioritize addressing economic situations, which involves taking unfavorable steps to ensure economic stability. However, even when attaining economic stability is the primary objective, you can meticulously recruit with proper planning and consideration.
Following are some things to consider before devising a talent acquisition strategy during a recession.
The first step recruiters and business leaders must take while devising a talent acquisition strategy during a recession are to determine the current openings and study them. Businesses should carefully understand the applications of candidates, shortlist only relevant profiles, and hire the right candidate using assessments.
While some begin layoffs and hiring freezes, others see it as an opportunity to hire talented personnel for their organization. Many Silicon Valley companies are carrying out mass layoffs and freezing hiring on the brink of recession-to-come.
For example, Amazon’s CEO Andy Jassy said in a note that the layoffs will continue in 2023.
However, tech giants such as Apple view economic turndown as an opportunity.
For instance, during the economic turndown after 9/11, Apple hired a top engineering talent that enabled the company to launch the iPhone and iPod in the coming years.
Thus, business leaders must view the recession as an opportunity for long-term growth and take steps accordingly.
Talent acquisition during a recession can lead to organizational growth, progress, and long-term success. Take the following necessary steps to implement the right hiring strategy:
The war for talent is at its peak, and the room for rest is less. Therefore, organizations must prepare a task force that operates on different fronts to find the best talent. Approach the active and passive candidates and determine why candidates are not choosing their current organizations.
Hiring managers should ask existing employees for referrals. They should also encourage employees to become a business spokesperson spreading the good word about the company’s culture and the treatment of existing employees during a recession.
Moreover, the task force must try to find loopholes in the process. If candidates are hesitant to respond or choose your organization over others, finding loopholes will convey possible reasons. These loopholes can include a slower recruitment process, a lack of trust in the organization, and many others. Recruiters should listen to these closely and tailor their approach accordingly.
According to research by Glassdoor, the average number of days taken for hiring is 23.8 in the U.S.A.
It is essential to act quickly and avail the talent before other companies hire them. Online tools can help accelerate the hiring process.
For example, Mercer | Mettl brings multiple online assessments to the table and the best-in-class proctoring system. From technical hiring and blue-collar hiring to campus hiring, the company helps recruiters accelerate the hiring process and avail the right talent during difficult times.
These tests are technologically-advanced, effective, and developed through extensive research and expertise. They give a competitive advantage during the recession and play a crucial role in finding talented candidates for different job roles.
Organizations may not be able to predict the economic conditions of the next few years. They can’t determine the duration for which the recession will last. These factors may impact their talent acquisition strategies.
For example, they may be hesitant about hiring full-time employees. In this case, businesses can hire freelancers or a professional on a contract basis.
As per Statista, there are nearly 70.4 million freelancers in the U.S.A. Therefore, it is smart to hire the best-fit freelancer during a recession, as it will not pressure organizations even if the economy does not stabilize in the coming years.
The gig economy is already rising and is expected to grow considerably. According to Statista, the global gig economy is estimated to reach US$455 billion by 2023. This presents a massive opportunity for organizations to reduce risks and tap into the gig economy to adapt and survive the recession.
Besides layoffs, hiring freezes, and reduced budgets for talent acquisition, organizations can think of other ways to cut costs.
For instance, adopting a remote working culture can effectively reduce operational costs. Work from home culture eliminates the costs incurred in rent for commercial spaces, maintenance, pantry, transportation, electricity, and others.
Additionally, automate repetitive tasks. According to the research by Gartner, financial service providers utilizing automation are expected to lower operational costs by 20%.
In place of missing out on top talent due to budgetary constraints and hiring freezes, which reduces growth opportunities, organizations need to consider ways to cut costs differently.
Talent acquisition is a challenging task that gets tougher during a recession. With organizations prone to hiring freezes, budget limitations, and layoffs, there are many ways to avoid taking extreme steps and acquiring top talent. By viewing the recession as an opportunity to get the best-fit people, organizations can set themselves on the growth pathway. Read how you can hire top talent during a recession.
Recession leads to economic turbulence and impacts talent acquisition due to hiring freezes, lack of strong morale of job seekers, and budgetary constraints.
Organizations can conduct skill-gap analysis to determine training needs and provide necessary learning to employees. They can also offer leadership assessments to identify and promote leaders to leadership roles.Mercer | Mettl provides an extensive suite of online assessments, and Training Needs Analysis is one of them. It has a structured process to identify employees’ skills gaps and reskilling requirements. The results can help businesses and recruiters determine the training needs during a recession, which saves a lot of money. Moreover, with the help of the Leadership Assessment, organizations can identify leaders and promote them instead of hiring new leaders.
Many companies hire during a recession by taking thoughtful and strategic steps. They see recession as an opportunity and devise strategies to attract top talent.
Originally published December 22 2022, Updated January 17 2023
Talent acquisition is all about strategizing for sourcing, hiring, and retaining the talent an organization needs. This blog offers more insights on the topic.