An economic slowdown presents the opportunity to find candidates who are an optimal fit, improve company culture, and level up hiring processes.
We don’t know exactly when a recession will hit, despite that economists have been keeping a close eye on the signs of an impending recession for months. What we do know is that the past few years have demonstrated unprecedented demand growth, supply chain shortages, and inflation, and the nature of the business cycle is to slow down after a boom.
For now, the economy hangs in a gray area. Despite continued robust job growth in the United States, certain sectors are struggling. Massive layoffs in the tech industry, especially at companies that were previously on a fast growth track, indicate traces of a sluggish economy.
What does this mean for HR?
For one, it means that there’s no reason to panic. Regardless of market conditions, companies will always need to hire and manage talent. But recruiters do need to adjust their hiring strategy to swiftly move with the ebb and flow of the economy. Instead of competing to fill as many positions as possible, the smart recruiter knows that a slowdown is an opportunity to find candidates who are an optimal fit, improve company culture, and level up hiring processes.
Here are four ways your company’s HR department can adjust its hiring strategy during an economic slowdown:
- Be more selective but move fast when you do find the right candidate
The good news is economic slowdowns have a way of creating a larger pool of
talent to select from. When more candidates apply for your job listings, it behooves smart recruiters to be more selective. One way to do this is by supplementing hiring decisions with data. For example, using an interview intelligence solution that succinctly summarizes objective data allows you to have more information available in front of you so you can determine the best candidate fit. Taking the time to be selective can pay dividends in the form of getting more value from fewer new hires.
That said, you can’t drag your feet when you do find a qualified candidate who you’d like to join your team. Even when the economy is in flux, there will still be some competition for top talent. The best, most in-demand candidates will likely accept compelling offers quickly, as nobody wants to be left unemployed when the economy enters challenging territory. Be ready to send an offer once all the internal stakeholders have responded positively to a candidate; you don’t want to miss out on a qualified applicant by letting a competitor beat you to the chase. Although we’ve all lived through periods when open positions languished for too long, that may soon change with the economy, especially in technology.
- Improve company culture
An economic and hiring slowdown may present a tremendous opportunity for your organization to rethink and reshape its company culture in ways that you didn’t have the time or energy for in the past. If you experience a lull in hiring, use that time to explore your company values. For instance, you can poll your employees, find out what makes them happy at work, then shape your company policies around their top values.
Cementing strong company values will also aid in recruiting and interviewing. With clear aspirations for your company culture, you can begin to evaluate candidates in a more
nuanced way that considers whether or not a true two-way culture fit exists. A valuable side effect of taking steps to improve your company culture is reduced turnover. During a recession, holding on to your talent is a critical advantage; the last thing you want is to lose top-performing employees while the market is wavering.
- Ramp up internal hiring
Another aspect of managing talent during a slowdown is becoming more efficient with resources. The first and healthiest way to exert damage control is to shift resources from nonessential functions to those that are crucial for the company to operate. Focus on tapping into your existing workforce to handle the most urgent and important tasks before doing any external hiring. The loyal employee who already knows your company inside-out is often your strongest choice. Not to mention, it can harm morale if your organization goes through layoffs only to hire externally for essential roles.
Studies show that giving existing employees new opportunities to advance their careers within the company can reduce recruiting, hiring, and training costs while boosting employee loyalty and commitment. In fact, external hires cost 18 to 20 percent more than those promoted from within and deliver significantly lower performance for the first two years.
- Revitalize your tech stack and hiring process
When the economy operates at full throttle, there’s barely enough time for HR to handle
the day-to-day tasks. That’s why an economic slowdown can be a blessing in disguise—a pause where you can reassess, revitalize, and experiment with your HR tech stack and hiring processes. Start by asking strategic questions that you wouldn’t usually have time for during a busy season:
- What are some bottlenecks in your hiring process?
- How effective are your DEI initiatives?
- How do you structure your interviews? Do they capture the data you need to make informed decisions?
- Are you screening, interviewing, and selecting candidates in an unbiased way with that data in mind?
Then, identify how you can use the rapidly advancing HR tech solutions to deploy innovative recruiting and interviewing solutions that strengthen the infrastructure you already have. For example, you can leverage an AI-powered interview assistant to help interviews go smoother and get objective, actionable candidate insights immediately after interviews. Making time for employee training around new tech tools and processes is also essential if you want to use the economic downturn to your advantage. With new productivity tools at their fingertips, your HR department will be able to automate certain processes and take on more responsibility when the demand for hiring ramps up again.
When hiring slows down, prepare for the next sprint
An economic and hiring slowdown does not have to be negative for your organization. It’s the right time to revamp your talent management processes for more efficient outcomes.
By taking time to evaluate, improve, and implement new solutions that modernize and streamline your processes, HR can strengthen its position all around and take an extra beat to make sure each open position is filled by the right candidate.
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ABOUT THE AUTHOR
Richard Mendis,
CMO at HireLogic
Richard Mendis is the CMO at HireLogic. He has more than 20 years of experience in the tech industry and is using AI and interview intelligence to help companies hire smarter.