It’s no secret the fear of a recession is on the rise. According to a recent article by CNBC, “A U.S. recession is ‘quite likely’ next year as persistent inflationary pressures force the Federal Reserve to shift interest rates higher than expected.” As you can see, the experts agree a recession may be coming in 2023. Knowing an economic downturn is likely, you may wonder how to grow during a recession.
Blue Signal is here to answer that question. There are many things your company can do to grow during a recession and stay ahead of any economic downturn impact to your business. Our team is deeply involved in understanding the current market trends that will make a difference to your hiring strategy; an approach that is crucial for growth during a recession. While economic downturns can be scary, they also foster unique opportunities to take advantage of. According to a study from Bain & Company, there are 47% more “rising star” companies during declines than in stable economic periods. So, what makes a “rising star” company despite the consequences of an economic decline? Keep reading to learn the top five things you can do to recruit and hire during a recession.
Top 5 Tips Include:
First, What NOT To Do – A Hiring Freeze
As the fear of the recession settles in, news of layoffs begins. While downsizing may seem like the safer route, it can also bring serious consequences to your company. A hiring freeze could result in loss of profits, the opposite of its intended purpose to reduce costs. According to The Human Capital Hub, a hiring freeze can cause a decrease in productivity, bad publicity, fewer opportunities for development, and responsibilities burdening for current employees. Research of past recessions found “companies that reacted very negatively to the recession remained flat, while those companies that doubled down and took advantage of competitive moves to drive growth, actually had outsized growth coming out of a recession” according to Bain & Company.
Rather than halting all hiring, begin by strategizing your hiring plan moving forward. It’s important to distinguish what your company needs most to succeed and grow during the recession. An economic challenge can be a great opportunity to grow, and the first step is to have a recession proof hiring plan. During a recession, it’s important to be more strategic and stay ahead of the challenges that may arise. In fact, a report from ZoomInfo found “the companies that take a more focused and targeted go-to-market approach come out on top.”
To Grow During a Recession, Conduct a Skills Gap Analysis
A skills gap analysis is a vital tool to utilize to identify what skills your workforce possesses and what they lack, especially if you want to grow during a recession. Conducting a skills gap analysis can help ensure the organization is ready for any changes and challenges that may lie ahead. “The analysis will prompt essential management questions, expose latent staffing problems, and map out a path to increased efficiency and productivity” states a report from SHRM. The skills gap report can guide hiring priorities, create opportunities for training and development, and provide insight on where to allocate funding.
Find the Right People
It’s important to not cast your hiring net too wide. Utilizing the results from a skills gap analysis, companies can narrow down their search to fit their crucial hiring needs. According to Forbes, it’s important to focus on quality over quantity, despite the increased competition during this time. Now is the time to reach back out to passive candidates and seize the opportunity. A report from the Harvard Business Review recommends asking top leaders within your company “to list three to five great players they would have liked to have hired over the past five years and then check in with those people.” With layoffs on the rise, the Harvard Business Review suggests this is the perfect time to “source potential candidates from target sectors and companies who may now be either jobless or open to change.”
Offer Competitive Salary and Benefits
During economic downturn, companies are focusing their search on highly qualified individuals to fulfill their open roles, making the talent pool more competitive than ever. As a result, competition drives up the price of high-impact workers. So, ask yourself, is your company offering an appealing package? Research from SHRM found that U.S. salary budgets are projected to grow, on average, just over four percent for 2023. The report also stated that “the labor market, inflation, and hiring and retention pressures were cited by respondents as key decision drivers in setting pay budgets for 2023, along with concerns over economic pressures.”
But what if you don’t have the capital to increase salaries? If you don’t have room to increase your salary budget, consider offering non-monetary benefits like remote work, unlimited PTO, volunteer time off, and more. Offering remote opportunities can increase your talent search pool, provide your company with a competitive edge, and help save money. That’s right, according to findings from Fortune not only do employees save money by working remotely, but it can benefit your company too! Offering non-monetary benefits can greatly impact your ability to grow during a recession, without costing your business.
Focus on Company Culture to Grow During a Recession.
While economic declines can be stressful, it is important to not lose focus of building a positive company culture. SHRM states, “while it's tempting to focus on the bottom line and keep costs down, remember that your employees are your most valuable asset.” If employees are unhappy, they will not perform well and if performance is down, so is business. By building a positive, diversified, inclusive work environment, your company will stand out to job seekers and help to retain your current workforce by keeping them happy.
The challenges of keeping your company afloat during an economic downturn can be intimidating, and trying to grow during a recession may be even more daunting. With these five strategies to grow during a recession, your company will be equipped to not only survive but excel. As recruiting experts, Blue Signal has the industry knowledge to help your company navigate your hiring efforts during these difficult economic declines. When planning your recruiting strategy during a recession, remember to consider ways to build resiliency into your workforce. By staying clear of hiring freezes, conducting a skills gap analysis, narrowing your search for the right candidates, offering competitive pay and benefits, and focusing on the company culture, your company can find growth amid the recession. If you want to grow during a recession but are unsure of where to start, contact our team at Blue Signal today to schedule a call and address your hiring needs.