Hiring During a Recession Might Not be as Easy as You Think
With unemployment on the rise, more and more companies are struggling with the decision on whether to downsize or take this time to fill any holes in talent. However, identifying and hiring high performing talent might not be as easy as it seems. It’s true there are going to be more job applicants than job openings, which is bound to happen when we see this level of unemployment. The problem that arises is the talent gap – many of these applicants are unqualified for the role they are applying for, which leads to companies fighting over the few talented applicants in the pool. So how can recruiting managers ensure they are taking the correct steps to hire during a recession?
During the last recession, managers noted that positions that used to take 2 months to fill ended up taking 8 months to fill. Managers continue to hold out for more skilled candidates, but if they don’t have an effective way of identifying them, they’ll end up missing out no matter how long they hold. These same managers tend to get in their own way, as every time a qualified candidate does land on their desk, they take that as an indication that other more qualified candidates must exist out there, once again lengthening the recruitment cycle. While it may seem like waiting for the perfect candidate is a wise decision, this strategy actually hurts the business and causes many small to medium sized companies to suffer. This paradox of a worker shortage during periods of high unemployment has caused countless businesses to delay expansion plans, move their operations, or even close doors for good.
Even after identifying these problems, recruiting teams are still fighting an uphill battle. Inbound applicant requests continue to rise in a recession, overwhelming recruiters with thousands of resumes. This becomes an issue of finding your needle in the haystack and sticking with that needle, a process that has not been overlooked by some of the world’s top business leaders. 3 out of 4 CEO’s feel that the tightening labor market and inability to hire necessary talent is the number one business challenge they face in the coming years. Recruiting is no longer a mundane yet necessary task, it’s the foundation of the entire business, and needs to be invested in for the rest of the company to succeed.
Vacant Positions are Very Costly
As the CEO’s have discovered, the issues stated above have a profound impact on a businesses’ bottom line. Cost per hire and time to fill increase during a recession, which impacts both the recruiting budget and the overall budget. In 2009, it was found that the average cost of turnover for an $8.00 an hour (roughly minimum wage) employee was around $5,500, due to the increase in time to hire. The true cost of having roles vacant depends on the salary and % of revenue that specific role impacts, but is a loss of income with each passing day. To keep our example consistent, for a role that normally pays $8.00 an hour, and whose wages are 33% of revenue in their department, it costs a company $78 a day to have that role vacant. And those numbers only increase as you move towards corporate roles with higher salaries and higher impacts on revenue.
For the staffing team, the goal is to place candidates in roles quickly, and more importantly, faster than competitors. While you want candidates to be qualified, don’t spend too much time looking for the perfect fit. Every qualified applicant that doesn’t get hired is another candidate that can be headed to a competitor. It is the staffing team’s responsibility to promote processes that will support quick and efficient hires. Remove barriers that can extend the hiring process, such as excessive interviews or unattainable qualification requirements, while promoting employee and candidate engagement to move the hiring process along.
Your Traditional Hiring Methods Aren’t Going to Cut It
As the world braces itself for the coming recession, staffing teams certainly have a lot of work to do in order to prepare for the new world of hiring. Getting time to fill rates down should be of utmost importance for companies worried about increased costs while in a slowdown. Think about what tools you already have at your disposal, and what additional tools or strategies would help keep cost per hire down. Changing processes is a good place to start. As proven in the last recession, time and time again managers were unable to get out of their own way. Take a critical lens to your hiring procedures, and eliminate any steps that can create blockage in the candidate pipeline.
Beyond processes, overall hiring strategy needs to be changed. Large corporations should try to never waste a candidate. If there are multiple roles open across different departments, communicate! Instead of letting a qualified candidate fall out of the recruiting cycle, see if they would be a fit elsewhere. While there are methods to enact cross-company sourcing manually, make your life easier and identify technology that can help with this. For companies with hundreds of open roles and thousands of applicants, technology is a necessity, not a luxury. A recruiting team can only do so much to combat time and cost to fill, while the right technology can do the work of ten recruiting teams, leaving the actual recruiters’ to focus on the more intricate details of the candidate lifecycle.