Stormy Waters Ahead for Recruitment
"W.T.F. are the candidates?" was the title of my talk at the excellent #Recfest2022 in
Knebworth Park.
The general gist of this was that we are entering into unparalleled times, that will present some real challenges for anyone working in the talent space. Economically, all the indicators are that we are either in the early stages of recession, or are heading that way. There is high inflation and cost of living globally, and things are reaching breaking point. Political leaders are keen to talk up the prospects of their individual economies, in a blind belief that if we don’t talk about it, then it won’t happen.
I’m not convinced that the ostrich strategy is really going to help anyone. We are now beginning to feel the real cost of Covid, there's a war on in Europe, and our supply chains appear to be well and truly broken, (not least in talent acquisition.). Only by talking about it openly can talent leaders figure out the best strategy to deal with it.
Being quite old, I have worked in and around recruiting through 5 or 6 recessions, that have lasted 18 months to 2 years each time. The patterns have been fairly similar, and each time I have been able to call on the experience of the last to figure out what is likely to happen, and the best course to plot in order to get to the other side intact. This time though, things are fundamentally different.
In a “normal” recession, we have increasingly more candidates than jobs and the challenge
is controlling the volume of applicants whilst maintaining some level of candidate experience. Hiring teams get cut in line with demand, and hiring managers get increasingly fussier because they feel that they can. Whilst there are fewer hires and fewer opportunities in the market, the pressure to get things right with no time for error makes hiring harder. This is offset by the scarcity of opportunity and the high volume of available candidates, particularly with a high volume of lay-offs and rising unemployment. The salary and package levels for new hires typically come down as a result of lower competition.
This time around, though, it is looking like things are going to be completely different, and to
some degree, we are in uncharted territory. Recession usually brings rising levels of unemployment, but right now, whilst we face recession economically, we have never had lower levels of unemployment, with a continuing scarcity of talent.
Whilst some organisations are making cuts to headcount (about 20% in tech), there is no let-up in demand. The skills shortage is partly responsible for this. A lack of workforce planning and the appropriate pipelining, means that organisations are continuing to report real difficulty in hiring, and whilst competition from other hiring companies is dropping, it is not dropping enough to offer
any real advantage.
What we are beginning to see as a C-Suite reaction to the economic environment is arbitrary hiring freezes whilst organisations take stock of what are the critical hires and look to cut central, such as marketing, talent acquisition, HR, etc. What I'm seeing is the net result is stop/start hiring. Freezes, followed by a rapid sprint to hire and fill in the critical gaps in manpower.
Numbers of resignations at this time continue to rise, as employees feel overloaded by having to work in a short-staffed team and carry extra work (as they did through the covid years), with no let up in sight. A continuation of the crisis from covid to the economy has put paid to that.) Since all hiring is seen as critical, there is increased pressure to hire quicker when the green light goes on. TA teams need to be ready to source quickly and present relevant shortlists whilst managing hiring manager expectations.
What this means is that TA leaders need to develop an expert voice and use demonstrable data to set realistic expectations, demonstrate a clear hiring plan and timescale, and remove obstacles to attraction. It will also mean asking for the extra budget when a sprint campaign is needed to bring in talent quickly, even at a time when organisations are looking to cut costs wherever possible.
This starts with understanding the complexity to hire for each individual role. The basis of this is talent market insights applied to each job. You need to have a clear picture of the competition for the talent you want, from availability by location to the skills breakdown of the ask to the competitiveness of salaries and packages.
This makes the case for how hard it is going to be to hire and any adjustments that can be made. It presents the case for internal vs. external sourcing, and in cases where hiring is a supply chain (repeated demand), the need to invest time and money in the pipeline. This will be an important argument for keeping teams together during a period of hiring freezes. The demand for talent is showing no sign of dropping to a level where the hiring companies are not going to have to really compete for every hire despite a recession.
This is going to be a great time to prove your worth to your organisations. Just make sure you
bring data to create your strategy and to prove your case.