The importance of investing in people during a downturn
We’re living through one of the worst financial crises the world has seen since World War two. And with the recession prefaced by the uncertainty of the pandemic, and even before that, legislation changes such as the IR35 reforms, the recruitment landscape has changed beyond all recognition in recent years.
This might leave leaders reluctant to invest in people, with hiring freezes one of the most common responses to a period of economic uncertainty. But failing to maintain a focus on boosting growth can leave businesses even more vulnerable to the effects of a recession.
While this is a scary time, it also affords us an opportunity to rethink our hiring practices and be creative in how we work with our people resources.
In this article, we discuss three ways that leaders of businesses can invest in their people and protect themselves from the effects of recession.
1. How to retain employees during a downturn
Employee retention should be the number one priority of all people leaders right now. With an ongoing skills shortage and demand for talent far outstripping supply, your existing team is one of your most valuable assets.
The recruitment landscape is full of opportunities for your team members to move on to different employers, with headhunting for the top performers at an all time high. Individuals will always make the decisions that are right for their career, especially if they don’t feel appreciated and supported in their existing position.
Some of the strategies that can help you retain employees during this difficult time include:
- Providing flexibility – Remote and hybrid working has become the norm since the pandemic, and many people find that working in this way allows them to be more productive and have a better work life balance.
- Communicating an inclusive and supportive company culture – Reports suggest that company culture is one of the main considerations for people who are thinking about changing their jobs. Fostering a healthy company culture which recognises the achievements of staff as well as showing appreciation can go a long way to keeping hold of the top talent.
- Carrying out exit research – Talking to exiting staff members about the reasons why they decided to leave can provide the foundation on which you can base future retention strategies. It might be that they didn’t feel engaged with their work or did not receive opportunities to develop their skills; people who are leaving or considering leaving can give useful insights into how to retain staff in the future.
2. How to make smart recruiting decisions during a recession
The smartest decision you can make is to continue to recruit during the economic downtown. This is because there is a tendency to pull back on recruitment, as companies struggle to make ends meet, this leaves the market for the best talent wide open.
The main thing to consider when hiring during a recession is to make long term strategic hiring decisions, by hiring for the core skills which will drive your business forward, whatever the financial outlook.
Firstly, employers should carry out a skills gap analysis, and compare the existing workforce to the long-term strategy of the company. This will help you identify which areas should be prioritised in any hiring decisions and allow you to focus on quality over quantity.
Secondly, working with a specialist recruiter who can provide a variety of hiring options will ensure that you don’t waste valuable time and money on ineffective recruitment.
Thirdly, recruiting leaders who meet the same values of your company is crucial. These quality hires will be able to promote engagement, boost productivity and help retain staff during difficult times.
3. How to provide a better recruitment experience during a skills shortage
Competition for the top talent is always at its highest during a recession. With plenty of position mobility, many people are considering a move, and shrewd recruiters are headhunting the best leaders to help companies weather the storm of the recession.
This means that candidate experience and onboarding is even more important than ever, even the best companies can fall foul of losing the best candidates if they fail to remain engaged during the process.
Keeping candidates informed at every stage and providing a convenient and straightforward recruiting journey with plenty of encouragement will go a long way to ensuring that top talent doesn’t get side-tracked by the competition.
The economic downturn has been well publicised, and the media would have us all believe that there is nothing but doom on the horizon. But the smartest leaders will look to ways to navigate the coming months and years with careful decision making and strategic recruitment, and will be more likely to not only survive but also thrive, whatever the state of the economy.