It's quite common during periods of economic turmoil for CFOs to assume and declare that robust recruiting functions will not be necessary due to a surplus of talent becoming available as more and more firms engage in layoffs, consolidations, and the ceasing of operations.
Well-known and respected firms have already partially downsized recruiting using this failed logic. Despite this negative perspective, there are some positive things that routinely happen during bad economic times:
1. Less competition from other firms. If your firm isn't well known or doesn't have a strong employment brand, you will face less head-to-head competition for talent during this time. As other firms reduce recruiting budgets, the recruiting effectiveness of your competitors will decrease dramatically also, giving your firm a competitive advantage. Candidates will be easier to sell because they will have fewer options and counter offers to choose from.
2. More high quality candidates will be available. Not only are more candidates available during times of high unemployment, but higher-quality candidates are also available. Not only will laid off individuals be on the market but you should also target individuals that "survived" the layoffs and mergers because they will have reduced company loyalty as a result of all of the trauma. Taken together this means that innovators and top-performing individuals that could never be "drawn away" from their current jobs are now available and interested in lesser known firms. This surplus along with little competition makes "counter cycle" recruiting a great strategy for "loading up" with great talent, especially in the college market.
3. Weakened employment brands. As competitor firms make the mistake of conducting large-scale "public" layoffs, their employment brand and external image will be dramatically weakened. Thus providing increased opportunities for firms that have maintained or intelligently strengthened their employment brand during this period.
4. Turnover and retirement rates will decrease. As the downturn increases your employees desire for job security, fewer will even consider leaving their current jobs for firms where their lack of tenure will mean little security. This means that it'll be easier to retain your top talent (and recruiting won't have to work so hard to find replacements). Conversely, it will be more difficult to draw away top talent working at other firms. The downturn in the stock market and the dramatic reduction in the value of their 401(k)'s will also mean that fewer of your employees will opt to retire as soon as they are eligible, easing any baby boom retirement concerns.
5. Higher quality recruiters will be available. Tough times means that some excellent recruiters will be available for those firms planning for the long-term.
6. The dollar is stronger. The newly strengthened U.S. dollar makes recruiting international candidates much easier.
7. New recruiting technology is available. The availability of social networking and other web-based technologies now makes effective recruiting possible with little or no budget.
8. Capability to explode out of the box. If you successfully defend your recruiting budget, your firm will have the capability of "exploding out of the box" immediately after the downturn is over. This capability will put you far ahead of other firms that have decimated their recruiting capabilities during this time. In order to have that advantage, you will need to calculate and then report the negative impacts of "disassembling the recruiting function" to your executives. That includes costs related to the delays in being able to resume hiring, the increased risk of losing top applicants, the lower quality of hires and the increased startup costs related to reassembling the recruiting function.
9. Tight times make you stronger. A tight budget forces you to focus more on metrics and a strong business case. Both of these should allow you to better identify the most effective recruiting tools and approaches. By eliminating the deadwood, streamlining processes and focusing on the best approaches, you will eventually strengthen the function over-all.
10. Workforce planning will be encouraged. While it's often a "fight" to convince executives to invest in workforce planning, economic volatility and the pain of laying off talent they fought so hard to acquire almost always convinces senior managers of the need for a strong workforce planning function. Use this "lull" to develop an effective forecasting capability and a "flexible" recruiting strategy that "shifts" during the different economic cycles. Both can help you prepare your firm for the next imminent up or down cycle. Even if you successfully defend your recruiting budget during these volatile times, it's critical that you focus your resources on talent-management approaches that are both low-cost and effective.
*Ref: Dr. John Sullivan