Economists are sounding the alarm bells about rough waters ahead. Nobody – not even the best economist – has a crystal ball, so nobody knows how rough those economic waters might be. There are warning signs, however, and the ‘R’ word is being thrown around more often: Recession.
Times have been pretty good – against all odds, perhaps, given the pandemic-related uncertainty of the last couple of years. Job growth has been robust, and most recruiters have become accustomed to working in a candidate’s market. The last real recession was the ‘Great Recession’ of 2008, and veteran recruiters will remember what it was like to live and work through that tumultuous time. Recruiting in an employer’s market is a different animal altogether, and with so many people having entered the field over the past fourteen years, there are a great many recruiters who’ve never had that experience.
If the economy does slip into recession, it’s highly unlikely to be exactly like those in previous years. Past recessions have been marked by widespread unemployment, with high availability of talent in almost every field. The economy is more complex now, and the impact of a recession on employment would mirror that complexity. Instead of broad-based joblessness, you can expect pockets of higher unemployment in certain areas, with continued – even worsening – shortages in others. As if the job hasn’t been difficult enough, right?
That said, no matter how deep and prolonged – or short and shallow – a recession may be, there are a number of changes a recruiter can expect in their work. Let’s take a look at those changes, and some of the best ways to respond to them.
Recruiting in a Recession
To state the obvious, in a recession, there are more candidates on the market. To state the somewhat less obvious, this is both good and bad news for recruiters. In a hot market, the biggest challenge is to find and attract the interest of the candidates you want. In a cooler market, the challenge becomes more about screening and qualifying. With more people actively looking for work, the number of applicants for every open position will rise, and – statistically speaking – there will be a higher number of unqualified candidates for every qualified one. The needles are still there; the haystack just gets bigger.
In another sense, more candidates doesn’t necessarily mean easier recruits. Even in the midst of a slump, top talent is still in demand. The companies that employ them now want them to stay, and they’re doing what they can to keep them happy. Recessions also tend to make people a bit more reluctant to make changes; when the market is rocky, riding it out where you’ve got some tenure is often the safer bet. In the case of those passive candidates, expect it to get a bit tougher to pique their interest. Do what you can to mitigate the risk of last-minute cold feet – changes of heart and counter offers are more likely when candidates are worried about stability and job security. These are times to ask the tough ‘what if’ questions about candidates’ commitment to making a change.
Naturally, if hiring slows, there will be fewer recruiting assignments. On the surface of it, that’s not great news. Whether you’re in the agency world working with external clients, or in-house working with your hiring manager colleagues, fewer jobs means less work. And over time, less work can lead to less job security. If we assume that a recession is temporary, however, there’s an opportunity in the near term. When the recruitment world is as busy as it’s been over the past few years, there is precious little time to step back from the urgency. When things slow, you can. This is a great time to ‘sharpen the saw’ – to improve your skills, to take a fresh look at the fundamentals, maybe to take a course. If there is a slowdown in the pace of recruiting activity, use the breathing space to level up.
Candidates in a Recession
In a recession, the world will have changed for candidates as well. The rock-solid employment that many of them have enjoyed in recent years seems a bit shakier. Worse, of course, if they’ve found themselves unexpectedly on the market. Improving candidate outreach to get a higher response rate has been the focus for years, and the tables will turn. You can expect an increase in the number of inbound messages you receive, and in the frequency of communication from candidates following up. In a prolonged recession, it can be exhausting to field these messages, but once again there’s an opportunity for those who choose to see it. This is a great time to invest in relationships. If things do take a turn for the worse, they’ll take a turn for the better again. Smart recruiters will use this time to help and support candidates where they can, building strong relationships that will pay off when the market turns again.
On a related note, in a hot market, recruiters can be prone to developing different perceptions of active versus passive candidates. It’s not right, and it doesn’t happen intentionally, but there’s a tendency to see candidates who are unemployed in a time of low unemployment as less desirable. Heading into a recession, check yourself on that point. Recognize that you may have that bias, and do what you can to lose it. You’ll see a greater number of highly qualified and talented people who are between jobs.
There’s one significant change on the candidate side that is almost certain in a recession: fewer competing offers. When it comes to candidates who will be taking a new job, there’s less risk and uncertainty that they’ll reject your offer and accept another. However, in a recession that follows a boom, it’s possible that you’ll see more candidates whose salary expectations have been inflated by the overheated demand of recent years. Combined with post-pandemic desire for remote and hybrid work, you may find that candidates have unrealistic expectations for their next jobs. Prepare yourself for some tough conversations, and keep them as compassionate as you can.
Hiring Managers in a Recession
As we discussed above, a recession brings with it the potential for less demand for the work you do. The downside – for some – can be a professional existential crisis: what am I supposed to do when nobody needs me? There is, however, an upside. When there are fewer open reqs, fewer urgent hires to be made, it creates the time and opportunity to have a better quality of conversation with your clients, whether they’re internal or external. In many cases, it’s been too difficult over the past few years to slow down and focus in on the details. In slower times, it’s possible to have more consultative conversations with hiring managers about each role – expectations, requirements, nice-to-haves, what-ifs. Just as with candidates, a sluggish economy is the right time to double down on relationships with hiring managers.
There are many reasons to hope that a recession isn’t too bad, but here’s one more. It has seemed as if we’ve been on the cusp of fixing – once and for all – a long-standing and pervasive problem in recruiting: broken hiring processes. Too many interviewers conducting too many interviews, slow communication, reluctance to make decisions … the list goes on. In an overheated candidate’s market, it was easier to have direct and pointed conversations with hiring managers about these problems. When not fixing them meant not being able to hire the candidates they wanted, there was a powerful incentive for hiring managers to be open to lasting change. If there’s a pullback in hiring urgency as a result of a recession, that window for change may be difficult to keep open. No matter what the coming months bring, be prepared to keep hiring managers’ eyes on the horizon. When the market turns again, the companies who will win the war for talent aren’t the ones who’ve allowed themselves to backslide. The companies that have doubled down on their efforts to streamline and improve their hiring processes will win.
To Wrap Up …
Buckle up. All signs point to a bumpy ride over the next few months, and possibly years. Recessions are difficult in the recruiting space, so if there is a deeper recession, it’s highly likely that some of us won’t stick it out. But there are others of us – people who love the business and the work and who want nothing more than to stay in the field. As Winston Churchill said, never let a good crisis go to waste. No matter the scale of the crisis ahead, there’s opportunity ahead for those who choose to seize it.
