How to Hire Talent During an Economic Slowdown

In just three years, talent acquisition has undergone dramatic changes that typically take decades to unfold. We've navigated the turbulent waters of a pandemic-induced recession, soaring inflation rates, and a spectrum of changing workforce attitudes (think: The Great Resignation and Quiet Quitting).

The current macroeconomic environment is not doing recruiters any favors either. While the economy may have escaped the recession predicted by analysts earlier this year, conditions are still far from being favorable for job creation and wage growth

Volatile geopolitical factors combined with concerns around energy security and emerging technologies such as generative AI have had far-reaching consequences across every aspect of society, including recruitment and staffing.  

As we approach the last quarter of 2023, we look at how staffing agencies and recruiters can respond to the evolving dynamics of the talent market. This article examines the tactics and science behind discovering and hiring top talent in the challenging economic climate. And most importantly, what this means for recruiters.

Recession or not, the Quest for Talent Reigns Supreme

Throughout this year, high-profile layoffs at major companies such as Google, Microsoft, and Meta have been underpinned by a consistent trend: organizations are placing greater emphasis on specific skill sets. For instance, Microsoft and Meta recently announced significant workforce reductions while expressing intentions to hire talent for other business divisions to retain their competitive edge. 

Similarly, beyond the tech sector, we've witnessed a surge in demand for blue-collar workers across various industries, including healthcare, logistics, trucking, and hospitality.

Clearly, there remains a strong demand for talent. What’s changed is the skills organizations view as desirable today.

This is consistent with historical trends seen during other economic downturns. In 2009, for instance, organizations focused on acquiring new skills as a way to mitigate the impact of the recession. 

Bar chart illustrating the expected actions of corporate executives in response to the 2008 economic downturn
Source: Managing talent in a turbulent economy, July 2009

How to Hire Through an Economic Slowdown

As businesses adapt to a cooling economy, talent acquisition takes center stage in shaping the workforce agenda. Recruiters and staffing firms have a unique opportunity to become pivotal allies for their business counterparts, collaborating closely to address critical business challenges through strategic hiring.

Below, we share five recommendations on approaching hiring with purpose through 2023 and beyond. 

  1. Apply the Pareto Principle to Talent Sourcing Channels

The Pareto principle, or the 80/20 rule, suggests that 80% of outcomes stem from 20% of the causes. The biggest reason to use this rule in talent sourcing is to ensure you only allocate resources to the most efficient channels.

Talent sourcing is expensive. And we’re not just talking about the cost of posting jobs, salaries, agency fees, or SaaS licenses. There are significant opportunity costs associated with sourcing. 

For instance, it is common for sourcing teams and staffing firms to spend hours at end on LinkedIn, manually harvesting candidate profiles and sharing them with hiring managers without actually connecting or engaging with the candidates. 

Analyzing what sourcing channels and activities have the most impact is the first step to approaching sourcing strategically. 

  1. Forecast Demand with Data (And Inside Information)

Recruiters are best positioned to understand hiring signals for their industries. You have inside information on what roles are most in demand, the skills and experience employers seek, and the salary ranges offered.

You also have a deep understanding of the competitive landscape of your industry. You know which companies are hiring aggressively, which are struggling to find talent, and which are on the verge of making big announcements.

This gives you a unique perspective on the hiring market. You can use this information to help your clients/business counterparts find the best candidates for open positions.

For instance, there is a sudden increase in demand for a particular skill or type of experience. This could indicate that a new trend is emerging in the industry or that a particular company is about to launch a new product or service. You can use this information to advise your clients or hiring managers on which roles to prioritize.

It all comes down to preparedness. Better-prepared recruiters can help their clients and organizations thrive during a slowdown. 

  1. Proactively Identify Passive Talent and Engagement Them

Passive talent engagement is one tactic that recruiters often get wrong. It's a common misconception that a simple switch can instantly transform passive candidates into active job seekers. And we’ve seen variations of this switch in action – most often, it is over-engaging with a prospect on LinkedIn – reacting to all their recent posts on LinkedIn or just adding them to a careers newsletter and hoping they apply to a role they find interesting (the email version of spray-and-pray). 

However, this seldom works. 

Passive candidates, by definition, are not actively seeking new opportunities, which means they require more than a hastily composed InMail to engage them effectively. The key to engaging passive candidates lies in the art of personalization, especially in times of economic uncertainty.

In such times, you have a unique opportunity to cultivate genuine, organic relationships with these candidates. By adopting a thoughtful and deliberate approach, you can build lasting relationships that prove invaluable when filling challenging, high-demand roles (check out how to drive engagement with our personalized email outreach framework here). 

  1. Diversify your Talent Pool

During an economic downturn, one crucial area to focus on is expanding your talent pool. 

For those actively recruiting, it's wise to diversify your talent pool. Get creative when considering prospective candidates. Consider this: in 2023, over 99 million civilians aged 16 and above are outside the labor force. While some are unable to work due to factors like illness or disability, others, such as full-time parents, have chosen not to work

Take, for instance, the 55+ age group, who often face the choice between full-time retirement and full-time work. By tapping into this pool and similar segments, you can expand your talent pool and ensure your organization remains agile and competitive in the evolving economic climate.

  1. Double Down on Recruiting Tech

This advice may seem counterintuitive, especially in times of economic downturn when budgets are tightening. However, when we say double down on technology, we're advocating the pursuit of efficiency.

To clarify, we're not suggesting investing in extravagant hiring software that costs $2000 per user per month. Instead, explore innovative and cost-effective solutions that allow you to do more with less. 

Maintain flexibility in your approach to your recruiting technology stack.  While acquiring a tool with all the bells and whistles might be tempting, the key is to assess what truly matters in terms of results. Ask yourself which features or solutions provide access to the widest pool of candidates. Is there a clever, budget-friendly tool that can effectively address your most pressing hiring challenges? 

Prioritize efficiency and practicality to make the most of your recruiting technology investments.

Conclusion

In times of economic uncertainty, we’re often obsessed with the near-term impact on business, overlooking the longer-term benefits of strategic thinking. Taking a step back to reevaluate what drives our competitive advantage as a recruiter or staffing firm is critical to building a resilient, forward-looking road map that not only helps you navigate recruiting challenges amid a slowdown but also aligns with broader business goals.

Ready to hire the best people for your business? Learn how ChatterWorks can help!

Related Articles
The Definitive Guide to Social Media Recruiting in 2024
May 8, 2024
The Ideal Hiring Mix: How to Split Talent Acquisition Between In-House and Outsourced Resources
May 2, 2024
How to Manage Candidate Rejection Communication in 2024
May 1, 2024
Related Articles
Request a Demo