Will the global economy go into recession in 2020? That’s the worry on so many minds. News headlines reflect that concern with stories of trade disputes and that wonky-sounding inverted yield curve.
The validity of those fears is underscored by data from experts, such as the UN’s trade and development body, which recently revealed in its 2019 World Economic Situation and Prospects report that “Leading indicators point to some softening in economic momentum in many countries in 2019.”
Whether the economy is softening or hastening towards its next recession, what HR leaders know is that economic swings hit the workforce hard, and make it tougher to fine tune talent acquisition.
From 2007 to 2009, the Great Recession swallowed up 8.7 million U.S. jobs as unemployment soared to 10%. Job losses were greater than in prior recessions according to the Center on Budget and Policy Priorities. From career setbacks to retirement disruptions, it was a traumatic period for the U.S. workforce and one no talent or business leader wants to see replicated.
While no one can stop a recession or eliminate its impacts, HR leaders do have the power to fine tune talent acquisition processes ahead of the next downturn.
Here are five ways to fine-tune talent acquisition that, when done in advance, could ease the kind of stress and pain that plagued corporate HR and recruiting teams during the Great Recession.
Embrace a Total Talent, Data-driven Strategy
As company Boards and CEOs look to economic indicators and adjust spending plans, HR leaders need to have broad human capital insight in order to align workforce strategies with those evolving business strategies. While many businesses do a decent job of forecasting talent needs, a recession underscores why forecasting is only one part of the “total talent” picture HR should have in mind. The candidates you plan or hope to hire represent only one segment of the population affected by recession-driven change.
Rather than focusing narrowly on adjusting budgets or the number of new hires in its recession planning, HR needs to think bigger, going beyond typical knee-jerk recession mindsets that hurt businesses over the long term. Instead, HR should gather workforce and business data to analyze the many ways human capital translates into financial and organizational health and infuse those analytics into broader strategic planning efforts. That requires building a total talent picture that takes into account the full range of factors affecting workforce success—from risk management and supply/demand to proactive talent community development, employment branding, and performance management. It also means taking into account the contributions and management of all employment categories, from full-time and part-time employees to contingent staff and outsourced resources and vendors.
This total talent picture gives HR leaders the insight to provide proactive human capital guidance that can positively affect the financial and organizational health of the business in the near-term while also safeguarding the systems that drive workforce productivity, agility and satisfaction over the long term. With this, they earn a seat at the leadership table.
Ensure Your ATS Can Keep Up
While recruiters and hiring managers are currently struggling with a scarcity of skilled candidates, the deluge of applicants that come with a recession is hard for any team to manage without strong technology. Applicant Tracking Systems (ATSs), however, are only as good as the algorithms behind them and the data you put in them. As applicant volume and quality increase in a declining market, HR leaders need to ensure their systems are fine-tuned to help, not hinder.
The first ATS factor to consider is whether the system and tech environment have been configured so that recruiters and HR teams are able to create strong pipelining plans, integrate customized candidate messaging and deliver a valuable candidate/user experience. Assessing the ATS for these essential capabilities now, at a time when most businesses are seeing fewer applicants, is a great way to improve the system ahead of economic changes that cause spikes in applications and limit both system and staff bandwidth.
Another consideration is whether the ATS needs to be updated to capture different skills and qualifications. Is the job and requirements data being entered sufficient enough to identify the best candidates rather than simply bringing in large pools of candidates? Is the ATS feeding talent insights to the right leaders and managers with good, current reporting data? Are automated engagement tools current and able to set engagement and timing expectations for candidates while still promoting a strong employment brand?
An ATS can be an extremely useful support system as hiring volumes slow and candidate applications increase. An important way to get ahead of recession challenges is to ensure that the data coming in and the communications pouring out of the ATS are accurate and valuable.
Assess Incentive and Retention Plans
When unemployment is high and job hopping is rampant, incentive and retention programs swell in the hopes of capturing and keeping talent. As the pendulum swings, HR has an opportunity to strategically (but never callously) re-adjust programs to balance new needs. Those needs might include upskilling internal team members to limit the need for new hires with these skill sets.
The key in making changes to the scope of programs designed to retain talent is to ensure changes are communicated with grace and honesty. If employees are informed that budget dollars need to be re-allotted to support the development and retention of internal staff, the majority will line up in support of the program. If, however, changes are made behind closed doors and without thoughtful communication, people get nervous and it can ding solid employment brands that should be able to endure upturns and downturns.
Get Employment Brand Creative
A recession can be devastating to an employment brand. Salary, promotion and hiring freezes. Reductions in hours. These are actions businesses sometimes have to take during recessions and, without counter balance, they can erode faith and trust in a company’s employment brand. This is a place where HR leaders need to think creatively.
In which ways is the organization working to nurture strong relationships with employees and contract talent? Are most of them related to benefits and compensation? If so, consider ways to tap into shared company and employee values that don’t require extensive investment. Perhaps it’s committing time or resources to community and charitable programs that employees care about. Perhaps it’s opportunities to engage with and learn from business leaders. Perhaps its internal mentoring and apprenticeship programs that support ongoing skill and career development.
Another key to enduring employment brand strength is ensuring consistent, timely candidate communication. Even in these recent years of low unemployment and hard-to-find candidates, many businesses have remained astonishingly guilty of Black Hole Syndrome— behaving like a communication vacuum in which candidates send information, questions and applications and never hear back. Recession or not, ensuring your business is doing its best to communicate status to candidates and talent is key to employment brand strength and good talent relations.
Evaluate Outsourcing Opportunities and Vendors
Outsourcing recruitment functions to experts has driven growth in organizations around the world. While a recession is a downturn for the economy, many businesses find it can also be a time to infuse greater workforce management effectiveness and execution into their organizations. The recession-focused push to do more with less is still centered on optimization and driving greater efficiency. The need for recruitment and talent management excellence may slow due to economic conditions, but it does not go away.
Take a fresh look at your outsourcing vendors and opportunities. Are there current vendors that need to be reassessed or fired because of poor performance or rising costs? Are there models, such as recruitment process outsourcing (RPO) or managed service providers (MSP), that could increase quality and scalability and reduce costs? Could current gaps in HR services be met by an outsourcing partner that can establish a streamlined system in the downturn that will pay dividends over the longer term? The key is to identify areas of optimization early, and take action in advance of a slowdown. Get ahead of the recession in order to emerge stronger from it.
Some economists say a big recession is inevitable as markets rise high and fall big. Others believe that even if there is a recession it won’t hurt much. While no one knows for sure, HR knows that being prepared is the best way to support and maintain a committed, high-performing workforce. A flip in economic fortunes changes a lot. With the right forethought and action, it doesn’t have to change what makes a good business a good employer.