Recession: The impact it could have on recruitment
9.4 min read
It’s a common conversation topic at the moment; ‘are we headed towards a recession?’ With both the media and the workplace focused on the health of the economy at home and abroad, it’s no wonder that our clients, candidates, and colleagues keep talking about the possibilities.
Last month, Selligence’s Head of Sales, Nic Biffen spoke with Ian Blackburn, Director at global recruitment firm Hamlyn Williams, about all things recession related.
The early signs
One of the first signs any recruiter will notice is that clients will begin, very slightly, to downturn their job flow. This is something Ian Blackburn has already noticed across some of his recruitment team. He has seen how particular industries have begun to indicate early signs of concern and hesitance while there is something of a return to normality with vacancies following the huge global jobs rush over the last year.
Some of the larger global fintech’s, household names such as Klarna, Bolt, SumUp, Robinhood and PayPal, have begun making aggressive redundancies as they look to streamline and cut costs. In fact, these announcements have been making the news, and with the increase in these headline-stories, the more generalised social awareness and nervousness will have knock-on effects for others too. Companies are paying closer attention to their competition, monitoring their activities and following similar courses of action. There is a general nervousness in which all parties are wanting to measure their own progress against others in their industry and err on the side of caution with any big-spend plans.
On top of that, inflation in the UK, and globally, is increasing while taxes and cost of living are similarly growing. Not only are individual workers feeling the pinch here, but so are the companies. There’s a lot of talk around buoyancy and at the moment, and the market is still buoyant in many industries, but company and industry resilience is already showing a lot of variation.
There is a cautious recognition that some companies have been over-hiring, product releases have been put on hold leaving them with a surplus of staff. Job cutting is naturally the next step for these companies as they look to pull back on their unnecessary spending and place them in better stead for financial reviews and forecasting.
Blackburn went on to add that he’s noticed more attention is being paid into ‘what is a good investment? What isn’t?’ Both product releases and international expansion are being affected by these questions. Product releases need to be thought through carefully – what needs to be done verses what can wait. And yet the constant need to drive revenue remains.
Uncertainty in particular markets, for example here in the UK, are causing companies to rethink plans to relocate or open new offices here. Expansion plans are being firmly placed on hold in many cases, and with that comes a pause in hiring and laying off any prematurely employed members of staff.
Finding the winners
Just because there’s a looming recession, doesn’t mean that all companies are struggling. In fact, there will be many that are still thriving despite the difficult economic times. Blackburn notes that what’s important is being able to recognise some of these companies where opportunities still lie – then you need to make sure you have some of them on your client list.
Even with some more secure companies on your roster, there’s still a very real need for recruiters to be vigilant and not to rest on their laurels. In times of recession, building your client list with companies who are more resilient to economic change, such as life science companies, financial crime, compliance, and disruptive tech firms, is so important. Because the need for these companies always exists, they are a good bet to look into, even when other markets are struggling.
Recruiters will begin to see a shift in hiring patterns, even so. This shift will most likely see vacancies moving away from permanent roles to more contract placements as companies take on more short-term, manageable, and affordable projects. Having an ear to the ground, being well informed, and ensuring you keep thorough networking will help any recruiter in recognising who is likely to need support and on what sort of projects. For managers and team leaders, now is the time to make sure you’re maximising efficiency from each desk. With cost-cutting exercises a very real threat in many businesses, it’s essential that you get the most out of every consultant to keep healthy revenue rolling in.
Knowing where to look
Being flexible and identifying where there is still a need, if not a growing need, is another tactic recruiters need to be using at this point. Regulated industries have a necessity to remain compliant with ever-changing regulations – for any recruiter using their industry knowledge, moving into this sector now (if you haven’t already), is a no-brainer.
Nic Biffen is keen to point out that there are still businesses expanding, whole industries that are still growing. Take Airbnb, Square, Groupon, and Uber, for example; all of these companies were born out of the last recession we faced in 2009. What is key for success today, tomorrow, and next week, is being able to look outside of your normal playing field and recognise where there is still a growing need for services. Being able to pivot quickly, either in your focused geographies or industries, will also help individual recruiters and recruitment companies as a whole, now.
In the face of recession, there are always going to be those companies, and those teams, that see an immediate downturn in their job flow. Sales, marketing, and finance are almost always the first to get hit. Customers are certainly becoming more cautious about their spending, taking more time to evaluate and assess any decisions they’re making. Renegotiating terms of business with recruiters is bound to be on the horizon too as companies feel the purse strings tightening.
Job flow becoming lighter will be perhaps the first real hurdle that a recruiter will be directly affected by. The first step for any team lead will be to assess if this is something an individual team is doing, or if it is a wider impacting factor. It is so important to talk to the customer at this point, get their insights, find out what they are seeing and hearing and reacting to. Understanding where the root of this slowdown is coming from will help you find a route of action to negate some of these directly impacting issues.
Where job flow lightens, you’ll also see candidate flow increasing; another clear indicator that the market is turning. Currently candidate applications aren’t overly high, nor have they been over the past year or so, and it is still very much a proactive search for recruiters, like those in Blackburn’s team, to find the right candidates for the right opportunities. However, by the time you see an increase in applicants and a drop off in vacancies, it’s likely you’ll be facing an imminent recession.
On the flip side, candidates seem to have more of a lack of awareness of the consciousness on spend in many businesses at the moment. Biffen noted that candidates are still looking to negotiate hard on salaries, not seeing the market as having flipped. There is still a skills-shortage in technology and engineering candidates, but these are perhaps some of the few who can still command their price. Making candidates aware of pay freezes, reduced bonuses, slows in promotion opportunities etc., is a good way to help manage their expectations while still keeping them interested in new opportunities.
For companies looking to hire cheap and save money, they run the risk of losing that talent at the first signs of the country coming out of recession too, Blackburn warns. A candidate who accepts a low offer today, may do so in full recognition of the times, but they will know their worth and will be expecting more as we return to more economically stable times. For any employer who doesn’t acknowledge this, they run the risk of churn to those employers who will be prepared to pay them what they’re worth rather than what they can get them for.
How recruitment technology will keep you ahead
While reducing spend is obviously the first thing many facing a recession will consider, as a recruitment firm it’s actually worth doubling down on certain areas of spend. As the cost of jobs boards increases, renegotiating terms will be on the table as a very current problem, but spending on technology that will provide you with market intelligence can be well worth the spend.
Making jobs easier or more efficient, gaining access to information you wouldn’t normally be aware of, and getting access to candidates you wouldn’t usually find elsewhere, will help ensure a recruitment desk keeps working and stays busy. Stagnation in a recession fast becomes backwards momentum, and that’s something no company wants to be facing. Finding a product that can be a differentiating factor for your business can be worth its weight in gold.
An all-round solution
Talent Ticker allows recruitment consultants to come to their desk in the morning and have everything need already there; leads, contacts, and candidates collated all into one place, complete with predictive models to ensure that consultants are gaining a competitive edge. Saving a recruiter hours of business development research a day, Talent Ticker improves our user’s effectiveness as well as their efficiency. Using our database of 650 million real-time contact profiles, Talent Ticker also provides the latest numbers and emails for outreach ensuring higher connect rates and more productive conversations.
Our powerful automations and highly personalised multi-touch campaigns will help you to not only break the ice with a new customer, but will also increase engagement. You can even sync your tech stack and email to our platform too.
With the Talent Ticker Chrome Extension, you can gather key insights, vacancies, and valuable contact data directly from company websites and LinkedIn profiles. Not only that, but recruiters can also connect with prospects or candidates directly through the plugin and bypass any InMail and connection request limits.
Interested in learning more about Talent Ticker’s all-round solution? Book a quick 15-minute call with our team to see how you can spend less time doing business development and get more time to build stronger relationships with candidates and customers.
We’ll even pass along some free leads for your time. Book your demo today.