The UK is in a recession
With sky-high inflation, disruptive labour shortages and global supply chain issues, the UK, Europe and the rest of the world are currently undergoing a crisis of epic proportions.
According to Statista, in July 2022, 91% of UK households reported that their cost of living had increased in the previous month. This is up from 62% in November 2021.
The unavoidable fact is that we’re in a recession, and that situation isn’t likely to change in the short term. For leaders of any organisation this means a time of rapid change, budgetary stress and decisions that must be made quickly.
This brief guide is designed to help you understand, prepare for and navigate the current economic situation by rethinking past crises and introducing new steps to become cope with the current situation.
We will cover:
~ Key lessons from past crises
~ What a recession means for recruitment
~ 3 steps to becoming recession-proof
Key Learnings From Past Crises
How long do recessions last?
The lifespans of recessions are as varied as their causes. The Covid-19 Recession in the US was the shortest on record, only lasting two months between February and April 2020.
Whereas the longest on record – since the Great Depression in the 1930s – clocked in at 18 months. Known as the Great Recession, it caused unemployment to reach 10% in the US.
In terms of the average timeframe for a recession, the National Bureau of Economic Research has it at 17 months. However, only taking into account recessions since 1980, that average drops to 10 months.
While less than a year may seem as though we’ve avoided the worst-case scenario, it’s more than enough time to dramatically change the hiring landscape. Especially as businesses really start to feel the pinch.
What is likely to happen in the coming months?
A lot. There’s scarcely an area of business that doesn’t feel the impact of a recession. Cost-cutting becomes the norm, and there are fewer jobs than candidates resulting from redundancies.
Take the Great Recession, for example, nearly 60% of HR leaders reported initiating redundancies and downsizing. What they aren’t doing is hiring more talent.
What a recession means for recruitment
A recession is always a difficult period for recruitment agencies. Tighter budgets mean fewer companies are looking to hire. Job orders dry up and candidate numbers swell to the point where employers no longer need to outsource their search.
While an increase in applicants may prompt an employer to enlist the services of a recruitment agency to sift through CVs, this kind of work is nowhere near as lucrative as end-to-end placements.
The good news is, recruitment tech and specifically automation can simplify the work of each hire and bring a significant increase in revenue. It will also help facilitate a shift towards client-focused activities since it saves around 35 working days yearly per recruiter – that’s according to data from TalenLyft.
3 steps to recession-proofing your recruiting
This is a non-exhaustive list but these are highly impactful areas to start.
1. Consolidate your existing hiring tools into one hiring solution
Using multiple platforms from multiple providers is problematic. Your sourcing solution might not integrate with your CRM or ATS, and your CRM or ATS may not be compatible with your other tools. Aside from the obvious functionality headaches, it can cause the process of hiring to become too lengthy. And that’s something that could cause up to 78% of candidates to drop out, according to a People Management study.
By consolidating your existing tools into one hiring solution, or adopting tools that fully integrate, you will simplify and streamline your workflow. You will also avoid the time-consuming transition from one tool to another that could lengthen the process and lose clients to drop out. What’s more, you’ll save on costs by not subscribing to as many solutions.
2. Automate searching, sourcing, screening and shortlisting
We’ve already mentioned automation – it’s the common thread that underpins these strategies – but the truth is it does enable you to hire faster for less and with fewer resources. According to LinkedIn’s Top 100 Hiring Stats 2022, 70% of recruiters agree automation would increase productivity, and 80% of companies plan to invest in talent-sourcing software.
Now that we’re in a recession, your recruiters’ time is even more valuable. So any solution that makes their job easier is worth its weight in gold. Revisiting that TalentLyft stat above, just think what your existing recruiters could do with the 35 extra days annually that automation would allow. They would be free to build better relationships with top candidates and be much more targeted about who they consider for a role and who they call, giving you an advantage over your competition.
3. Target ‘higher-value’ passive candidates
This might sound counterintuitive, but it’s not. During a recession, if an employer is hiring, they will only select a candidate if that candidate truly represents stellar talent. So when employers make cuts to their staff, they typically do not cut their top-level talent, meaning they are still employed. The top talent is usually passive during good economic times, and that passivity only increases during tough times.
In terms of how to target higher-value passive candidates, tech and automation play a role there, too. PitchMe’s solution, for example, enables you to run a search of the entire internet using the data from an existing top-level profile, or an employer’s ‘ideal’ profile. During a recession you can bet your bottom dollar the candidates it will surface will be passive.
If you are considering adopting automation to help you cut costs while accelerating your hiring, we’d like to help you. Book a demo with us and we’ll show you how.
The bottom line
Recessions usher in periods of instability and decline, but as long as you take the necessary steps to prepare by utilising solutions like automation, they can be a huge opportunity for growth.
Furthermore, since many agencies will cease to exist, recessions also present an opportunity to gain a market share, build your reputation and position yourself well for when the market recovers.