Throughout most of our collective recent memory, talent shortages have been the watchword. With the exception of a relatively mild – and perhaps surprisingly short-lived – slump in the early days of the pandemic, most companies have felt a pinch when it comes to finding and hiring the people they need.
While nobody (at least nobody we know) has a functional crystal ball, there are an increasing number of signs of a slowdown on the horizon. People are using the ‘R’ word – recession – more often.
Since the last major recession is now over ten years behind us, there are many people – job seekers, and those in recruitment – who haven’t lived and worked through a recession. For those of us who remember the last one, our memories have faded with time. That being the case, it’s worth a look at some of the things that might be expected if there are economic headwinds ahead, and what to do to mitigate their effect.
Layoffs May Happen
We’ll start with the hardest truth: if there is a recession, more employees might find themselves unexpectedly on the market as companies make the difficult decision to downsize staff.
For anyone on the employer’s side of the table, this can be the most difficult business decision to make, and even more so to communicate to the affected employee. If you’re involved in the decision, this is a good time to get creative. There is some research suggesting that companies who find other ways to deal with downturns do better in the long run. If layoffs are necessary, however, it’s important to be as compassionate as possible. If there is a recession at all, it won’t last forever, and in time, companies will once again be fighting to hire the best. When the rebound comes, the companies who will win that fight will be those that did everything they could to avoid letting employees go, and where they couldn’t, treated those affected employees with respect and compassion. If this happens in your company, remember that in addition to more formal outplacement services, recruitment partners can be one resource to offer employees for support and assistance in a job search.
For employees, possibly the most important thing to remember is that being made redundant isn’t the end of a career. It’s only the end of one part of it. There are many cases, in fact, where people have looked back on a layoff as the best thing that happened to them. In these cases, it led to a new opportunity that took them further than they could ever have gone with the company who let them go. Of course, it’s very difficult to remember this (or at least feel it) at the moment. That’s why this is a great time to focus on the value you bring to your job and to your employer. Think about it, make notes to yourself about it, quantify it. Look back for emails praising your performance, and thanking you for jobs well done. This serves two purposes. First of all, it’s important to maintain confidence in uncertain times, and there’s no better way to do that than to remind yourself how good you actually are. And second, being able to understand and articulate your value is a good way to protect the job security you have now, and to compete for your next job if necessary.
More Candidates, More Competition
The flip side of the layoff coin, of course, is that in a recession, there are more candidates on the market looking for work. This has implications for both the job seeker and the employer.
For job seekers, there’s almost never an absence of competition. In a slowed labour market, however, the nature of that competition changes. There is the possibility of going up against a greater number of candidates, of course. But the other candidates might also have different experience (if more experienced people find themselves on the market), or have different compensation expectations than they’ve had in a more heated market. This is why taking time now to focus on your value as an employee is important. Recruiters can help with this – we’ll talk more about that in a moment.
For employers who have become accustomed to having few candidates for vacancies, a recession would bring a change to that, too. A downturn could mean a significant increase in the number of applicants, an increase that might not necessarily reflect an increase in the number of qualified applicants. While most companies see the value in working with recruitment firms in a tight market for talent, smart companies also see the benefits of continuing to work with recruiters in a slowdown. Recruiters can help manage the volume of applicants, allowing you to focus on other responsibilities, while also protecting your employer brand by keeping the lines of communication open with potential future candidates. One final note for employers: rightly or wrongly, in an overheated employment market, we can develop preconceived ideas about active versus passive candidates. Be aware that these biases may exist, and ensure your team is ready to assess active – perhaps unemployed – candidates in the same way as passive or recruited candidates.
What to Do Now
Whether you think of yourself more as a job seeker or an employer, the most important thing to do right now is … keep calm. There are a great many moving pieces right now in the world, and it’s understandable that there’s some uncertainty and caution with respect to the economic future. But a recession can become a self-fulfilling prophecy. Don’t let the headlines stop you from investing in yourself as an individual, and in your company’s future.
As employers, there are a few things you can do to ensure that you’re well-positioned for whatever is ahead. Over the past few years, to keep up with demand, you may have found yourself working with a larger number of recruitment firms. In the ways mentioned above, now is a great time to deepen relationships with a smaller number of those partners. Lean on them for the support they can offer you, and – if the pace slows – use that time to build a stronger foundation and partnership with them. Additionally, this may be the right time to take another look at your hiring processes, and iron out any wrinkles that could hold you back in the future. It’s tough to do that when the pace of hiring is what we’ve seen over the past few years. If the pace becomes more reasonable, it allows you to look at each stage in the process and streamline it so that it’s as efficient as it can be when we’re at full speed again.
If you’re reading this more from the perspective of an employee (or a possible job seeker), remember that even if there is a recession, job changes still happen. Companies still hire when the market slows, so don’t shut the doors to opportunity. On the contrary, this is a good time to keep your finger on the pulse of your network. If you’re on LinkedIn, update your profile and give it a polish, and – if time allows – dip your toe into relevant groups and discussions to stay visible. Touch base with recruiters who’ve been in contact with you over the past few years. Even if you’re not actively looking, let them know you’re open to staying in touch. This is also a time to ‘sharpen the saw’; to get your tools in shape before you need them. Take a fresh look at your resume, and make sure it represents you the way you want it to. Interviewing is a learned skill that improves with practice, and speculative or informational interviews are a great way to do that. The latter two are ways that recruiters in your network can be of help with – another good reason to keep those connections fresh.
Key Takeaways
Nobody knows for certain what the future holds – economic or otherwise. Yes, there has been some widely-publicized bad news (in some corners of the tech sector in particular), but the chatter about the possibility of broader recession may be premature.
So first, don’t panic. Don’t allow the daily headlines to pull your thinking too far in any one direction.
Then, in the meantime, bolster the foundations. As an employee, take time to understand your value proposition, make sure the ways you communicate that value are in tip-top shape, and keep your network strong and active. As an employer, think about the strategies you’d put in place to mitigate the effects of a possible slowdown, to ensure that if there is one, your employer brand emerges stronger than ever. The best part? Doing these things is beneficial, no matter the economic climate. So if the doomsayers are wrong – as they often are – you’ll still be in a stronger position than if you hadn’t done a thing.