While waiting for the recession – Rethink your recruiting budget
One foot on the gas pedal, the other on the break
How to navigate recruitment and talent acquisition in a schizophrenic economy
The clouds on the horizon keep piling up: war, energy crisis, increasing interest rates, inflation, a pandemic entering its fourth year, catastrophic climate change consequences, and some odd dictators here and there playing with nuclear missiles.
Economically, we are going through what we could call the great contradiction. In the past, and to (over-) simplify, inflation was the consequence of excess demand over supply, with as consequence higher prices, thus less consumption, and a general slowing of the economy. In the second phase, we would see a recession.
We have never seen such inflationary pressure, around 10% in Europe and 3% in Switzerland, but companies are still fighting to recruit talent. Normally, at this stage of an upcoming (over-) employment crisis, you would see, first, hiring freezes, then some layoffs, either as a prevention or because consumer demand has already slumped, and finally mass layoffs that would dampen demand, push prices down and prepare the way for a new growth cycle.
Not this time. We see consumption holding strong – at the writing of this article at least, things can turn around extremely quickly – unemployment on a downward trend and company quarterly results above analysts’ expectations. This is the paradox.
Nevertheless, the origin and causes of this downturn have some importance and influence on the duration of the crisis, and as far as we are concerned, we better prepare for talent acquisition challenges in the coming months.
As of today, the forecast for late 2022 is a mild recessionary climate with growth expected to resume in mid-2023. Overall, the EU economy is set to continue expanding, but at a significantly slower pace than expected in the spring 2022 forecast. Given the magnitude of the shock, a downturn in growth is 100% sure, but the chance of a full-fledged recession is only 30% to 40% so far.
What is an organization supposed to do? Believe in a rosy future where everything is going to turn out well (odds at 30-40% are not favorable)? Or prepare for the worst and start listing the people that will be let go first? Keep in mind, and you, of all people, are well placed to notice, talents are exceedingly difficult to identify, recruit, onboard, and keep. What is undoubtedly needed is forward-thinking leadership, at all levels and in all functions. And given what we have just described, HR, recruitment and procurement are at the forefront of the thought process.
The thing we learn time and again from past recessions, should this one materialize, is that they are cycles. Sooner or later, growth will come back. Today’s reality of the labor market is that it is dried out. On top of that, the increasing reliance of the economy on the services industry means that growth and production are in the hands of people, real people making things work: these employees provide energy, initiative, and creativity. People are the driving force. Their unique personalities, and their talent, make a difference. We need these talents. Truth is, you always need talent, whatever the situation. Actually, let’s re-phrase: you need talents in tough times even more than usual. Therefore, curtailing recruitment efforts and investment is no way to get ready for the future, at best, and can be deadly for an organization, at worst. HR managers and recruitment professionals will agree.
In parallel, budget cuts and internal financial pressure are another facet of uncertain economic climates. General management wants to decrease exposure to a possible downturn. Obviously, the business will suffer in the coming months, so preparing for it is an acceptable, even wise, attitude to adopt. And HR budgets are oh! so easy to cut.
This leaves you, in recruitment and HR, with only one option, doing the same with less. And doing with less is an exercise that you have become accustomed to in the past. Talking to our clients at mid-sized companies, we can safely state that less investment in recruitment and retention is no option anymore. Filling up vacant positions, attracting the best talent, and keeping them requires capacities, investment, and a sizeable budget. Operating on a shoestring won’t do it.
Low unemployment coupled with rising numbers of open positions are both clear signals of the severity of the talent market crisis.
What are you supposed to do? One option is talking to Serendi. The one-stop shop for talent acquisition. Serendi offers flexible attraction and recruitment solutions, customizable to your budget. Having an external recruitment supplier brings financial transparency, and allows for return-on-investment (ROI) calculations by avoiding diverse sources of candidates and runaway budgets. In addition, Serendi’s clients take advantage of its pan-European network, experienced recruiters, and well-working sourcing platforms for candidates, so allowing for recruitment cycles that are short by industry standards.
This is how to kill two birds with one shot: with Serendi as a partner, you can design a proper recruitment budget allowing human resources experts to attract strong candidates based on reliable and professional candidate experience.
Classic (and avoidable) pitfalls in talent acquisition:
Inefficiencies in your candidate journey are costing you more than you realize
Recruitment budgets are finite, and ROI can be difficult to prove
Finding the right caliber of candidates, and enough of them is often a humbling exercise in how to overspend the budget
Lack of control and insight is the primary source of inflated recruitment costs
When the world looks like it is walking on its head, it is the most important moment to prepare for, and invest in, the future. And how to achieve this better than by streamlining your talent acquisition process with an agile supplier capable of aligning all your interests.