As recessions reduce economic activity, it is well known that the effects may have far-reaching ramifications for business, such as decreased productivity, reduced hiring, and declines in output and sales.
Consequently, a commercial downturn can have a significant impact on recruitment and the job market as a whole.
While a recession can be a challenging and uncertain time, with careful planning and adaptability, it is possible for companies to withstand the effects and bounce back stronger.
Coping with the challenge of a recession can be a daunting prospect, especially if your business has grown rapidly in recent years and is now facing issues such as managing costs, a changing workload across a smaller workforce, and still remaining flexible enough to continue growing once matters change for the better.
However, difficult circumstances like these also present opportunities to whip your business into shape, as long as you make sure to capitalize on them and reorient yourself correctly.
- Less competition
Most companies are facing similar problems in a recession. As a result, competitors are scaling back, sitting tight, reducing spending, and laying off employees – meaning there is less competition for great talent, as fewer positions are open and are likely to be filled.
There is no doubt that businesses need to address short-term concerns in order to ensure stability, yet those that are able also to focus on the long run are more likely to succeed.
This is an ideal chance to take advantage of quieter business times and upskill employees, being better equipped to take advantage of when the economy changes. Internal & external trainings, certifications etc. can also save companies the cost of a new hire – from recruiting to onboarding and training.
Use this window to give your employees time to skill up in fields that will be key to their positions once business improves again.
- Access to available talent
In a recession, you’ll likely have more choices of top applicants. Many businesses have had to part with great talent, so this may be your chance to bring them on.
With many job seekers searching for their next employment opportunities, there is an unprecedented opportunity to tap into rarely available talent. Securing your next wave of strong hires now will allow your business to gain a competitive advantage when the economy improves—whenever that may be.
You can gain access to candidates from blue chip brands that have let employees go (Meta, Twitter, Stripe etc.)
We have experienced two major recessions at Allen Recruitment – Recession post 9/11 & The Great Recession (2008).
While both recessions presented great challenges to our business, they also provided us with opportunities to diversify our client and industry base and be better prepared for future downturns.
Here are the opportunities we seized that kept our business moving and what you can do to make them work for you:
Manage your costs through smart hiring solutions
- Utilise gig workers (independent contractors, temporary workers, contract firm workers etc.)
Contractors and temps can be an incredible tool to weather economic uncertainty. While costs can be a deciding factor in whether you choose to hire a contractor or a temp, that cost does come with exactly the flexibility that you will need to continue building your business in a difficult climate, as they allow you to adjust your financial commitments as needed.
Now, if ever, is the time to take advantage of the possibilities gig workers can afford your business as remote work makes available a larger pool of talent than ever before.
The flexibility and cost-savings that come with contractors and temps is a real advantage – less of a long term financial commitment to these workers which gives flexibility in economic uncertainty.
With a lot of recent redundancies and the uncertainty around the market, professionals may be especially open to gig opportunities.
An increase in remote working makes it easier for companies to employ remote workers across the world.
- Operational efficiency & cash flow
When a recession hits, many businesses look to cut costs and save on unnecessary expenditure. Cash flow could well prove to be the difference between a business surviving or dying.
Diversify the industries you work in
- A good approach is also found in establishing multiple industries – and types of customers that can be serviced, as this will keep the business afloat if one disappears. Identify industries where there are opportunities to grow in and that aren’t saturated.
- Explore new services – explore areas where you can offer your services. We have taken advantage of this by expanding our portfolio over time, introducing services such as Allen Outsourcing, Allen Enable etc.
- After the great recession of 2008, we significantly expanded our client base and the industries that we operate in so we are better prepared for future downturns.
Better times will come again
Recessions come and go and while they can be very challenging, it can be an opportunity to pause and review your business and come back strong post-recession
Ultimately, the key is to keep an eye on the bigger picture, which is that these downturns do pass. As Charles Swindoll once said, “Life is 10% what happens to you and 90% how you react to it!”
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