As interest rates climb and employment levels dip, you may wonder what an economic downturn could mean for your business. Companies from Facebook to Amazon have laid off tens of thousands of workers, while other businesses remain paralyzed, too afraid to take any action lest it be the wrong one.
But economic uncertainty unlocks extraordinary growth opportunities for small and mid-sized companies willing to be bold. With a flood of new talent entering the job market, businesses with a clear hiring strategy are finding they have access to an unprecedented quality and diversity of talent — and that they don't have to pay Fortune 500 salaries to attract A-players.
In this blog, we share our playbook for hiring during an economic downturn.
Read on to discover why now is the perfect time to invest in your workforce and how you can adopt a unique approach to thrive during a downturn.
Benefits of hiring during a downturn
As the country's largest companies downsize their workforces, savvy small and medium-sized business owners can expand their teams, find specialized skill sets or hire once-inaccessible talent.
Choose from a larger and more diverse talent pool
A higher unemployment rate means a larger and more diverse talent pool, with candidates from wide-ranging industries and backgrounds.
Additionally, with more candidates available, you have the luxury of being selective in your hiring process. Take the time to thoroughly assess each candidate's qualifications, cultural fit, and potential for growth within your company.
An expanded talent pool also means that you can identify candidates with specialized skills or niche expertise that may have been challenging to recruit during more robust economic times.
Attract top talent
Too many business owners think A-players are beyond their reach. But hiring the very best isn't just for Wall Street and Silicon Valley anymore. When times are tough, workers are willing to bypass the marquee-named companies and work for an employer who offers them flexibility and job security.
Save money on compensation packages
Hiring during a downturn can also be cost-effective. Skilled professionals may be more willing to negotiate their compensation packages. You may even find top talent open to flexible work arrangements or part-time roles, which can be kind to your budget and allow you to onboard exceptional talent.
To leverage this situation effectively, you can start by casting a wider net and considering candidates who may have great skills and experience but may have been displaced due to circumstances beyond their control. Such individuals can bring fresh perspectives and valuable insights to your organization, enhancing innovation and creativity within your team.
Foster loyalty and boost retention
Fostering a sense of stability and opportunity within your organization can attract candidates who are seeking a secure and long-term career path. Companies that demonstrate resilience and a commitment to growth during challenging times are often perceived as more attractive employers, making your small business or mid-sized company a top choice for job seekers looking for a stable work environment.
Signal strength to your customers and suppliers
There's nothing that tells people you feel confident about the future quite like a hiring push. When you hire while others are scaling back, you send the message that your financial position lets you navigate stormy economic times, that you are a free-thinker ready to buck conventional wisdom, and that you are loyal to those around you.
Now that you have discovered some of the reasons why doubling down on hiring during a downturn is a smart move, let's explore practical steps to build a winning hiring process:
Design your hiring strategy
You wouldn't build a house without a blueprint. So, don't hire without a clear strategy. Make sure you have a clear vision of your business needs, the goals a new hire can help you reach, and the type of skills you need to complement your existing team.
Write a clear job description
Even when unemployment is high, the best job seekers remain choosy, so it's up to you to sell the merits of this position. Tailor your job descriptions and showcase your company culture to stand out from the competition.
Build a recruitment plan
No matter how clear your job description, don't surrender recruitment to Indeed and LinkedIn. What you really need is a targeted recruitment strategy, with a clear profile of your ideal hire, an understanding of where they go to look for jobs, and an action plan for finding and connecting with them. Without that, you'll waste time buried under a sea of resumes and cold calls from job seekers. Remember, the upside of hiring during a downturn is lots of people are looking for work.
Attract Top Talent
Craft a compelling employee value proposition that appeals to candidates from larger firms. Highlight your company's vision, stability, and potential for growth to attract the best talent.
Build an Equitable Hiring Process
Prioritize diversity, equity, inclusion, and accessibility (DEIA) and ensure your hiring process fosters a diverse and inclusive work environment and is compliant with all legal guidelines. Seek out help from HR and recruitment experts, because an inadvertent misstep can expose you to liability and repetitional damage.
Assess Cultural Fit
Avoid team disruptions by ensuring that a new employee will embrace your culture and values. Employ proven techniques to ensure the candidates you select complement your company culture and mesh well with your existing team.
By leveraging the opportunities presented by higher unemployment rates, your company can navigate the hiring landscape more effectively during a downturn. Remember to cast a wider net, consider candidates from diverse backgrounds, and carefully assess each candidate's potential contributions. Hiring during challenging economic times can give your organization a competitive advantage and enable you to attract top-notch talent that will contribute to your long-term success.
Need help implementing these strategies? At CoachCruiting, we specialize in helping small and mid-sized companies attract and retain top talent. Whether you need a more targeted recruiting strategy or want to build a high-performing team, our expertise can help you achieve your hiring goals.