Many factors play into hiring decisions, such as supply and demand, competing businesses and economic recession.
And, with high interest rates and inflation, the job market feels more constrained and unstable than it did a few months ago.
The following explains how recession affects business and employment and offers tips on how to successfully navigate a struggling economy.
How does a recession affect hiring and recruitment?
Recessions — a substantial period of economic decline — are often brought on by supply outweighing demand, miscalculated market trends or a series of risky financial decisions. As a result, employers sometimes implement hiring freezes and layoffs as employers redirect their energy into investing in the staff they already have.
How have past recessions affected the job market?
The recent COVID-19-induced recession — sometimes referred to as the Great Lockdown — involved two back-to-back stock market crashes, which led to a 14% unemployment rate. The other notable recent decline between 2007 and 2009 — the Great Recession — resulted in 10% unemployment and approximately 9 million jobs lost. These recessions led to major societal and workplace changes that permanently affected the job market, including an increase in minimum wage and more people working remotely.
What to avoid during a recession
There are pressures and financial restrictions that a recession puts on any given business — both local and international. These are not pressures that should be ignored or glossed over but dealt with head on. And the answers to these problems are not always black and white:
Strategies for hiring during a recession
While budget tightening may be necessary during tough economic times, hiring new employees may still be necessary. Here are some tips for hiring during a recession.
Businesses need to identify the areas in which they are lacking, decide what positions need to be prioritized and work from there. The best way to do this is by conducting a skills gap analysis.
When looking for an employee that has a necessary skill set, sometimes, the best answer is for businesses to look at their own employee rosters. There are always a few people that go above and beyond in their jobs. These people are instrumental to workplace success, and giving them greater responsibility can improve morale, engagement and future recruitment.
Talent acquisition should be broadened during a recession, as businesses might only be able to hire the best of the best. Whether this means seeking other types of employment, such as part time or contract, or making job descriptions more attention-grabbing, altering the approach might give businesses more hiring options to choose from.
Don’t be hesitant to adapt to the wants and needs of younger generations. The job market and workforces change with social trends and economic stability, and adaptation is important to job growth and sustainability. Businesses should listen to what younger generations are asking out of their workplace and make appropriate adjustments accordingly.
Assembling a group of people to help find the best potential candidates can streamline the recruitment process and develop a more versatile workforce. This may seem counterintuitive during economic decline, but history has shown it can aid a company’s growth and give it more momentum heading out of the decline.
The ongoing pandemic has changed modern employment procedures, so it’s not the same as it was even a couple of years ago. The focus has shifted away from judging talent by a resume and toward viewing the prospect as a unique individual.
Adopting this mentality also leads businesses to look for talent in places they never would have considered otherwise, and this can improve morale and promote diversity. Businesses should use modern technology to their advantage.
Once a business finds a candidate to be a good fit, it shouldn’t wait to hire them. A delay might enable another company to make an offer. Businesses should make an offer quickly. Candidates notice this urgency, feel valued and are more compelled to jump on board.
It’s OK to not fully understand what steps to take next. When working with a recruiting agency, businesses should reach out to someone with experience in recruiting during economic downturns. They can provide expert insight on working closely with prospects, as well as what communication with them should look like.
How to survive a recession
When looking at employment in terms of economic trends, the best way to not only survive but thrive is to prepare ahead of time. Tracking the economy’s movements and how consumers respond to the market makes a business stronger, more efficient and more focused.
Certain industries may be able to weather an economic downturn; no company in a volatile economic climate is guaranteed to be recession-proof. If handled correctly, focusing on employee needs and using a quality-over-quantity approach to recruiting will create a business that can more adeptly take on economic and financial declines.