Article: Recruitment during recession: Is it really such a stupid move?


Recruitment during recession: Is it really such a stupid move?

Can recession be used as an opportunity to hire great employees

There are usually a lot candidates to choose from due to other companies making redundancies


The very fact that there is a big pool of employees could prove to be a problem if the HR department is not prepared


It is a well known fact that come time of economic slowdown, the recruitment budget of an organisation is the first to be frozen. As the economy hits a recession, the normal reaction of most companies is to hunker down and wait until the storm passes; this typically includes trying to increase efficiency by keeping any unnecessary expenditure to the minimum. Even thinking about hiring new staff while the company is desperately looking to cut costs would be seen as a joke amongst most leaders and managers. On the face of it this seems to be a logical assumption. However, is recruitment during this period really such a bad idea?

A recession is not the end of the world

Slowdowns and upturns are part and parcel in the running of the world economy. And most recessions, however painful they may be, are usually followed by economic recovery. That makes fiscally low periods the perfect time to refocus on organisational assets, cut down on its weak points and work on its strengths. By doing so, managers can plan and make preparations in order to maximise the benefits of the upturn when it comes.

Increasing employee productivity while minimising costs can be safely defined as the Holy Grail for HR managers the world over. In times of plenty it’s a lot easier to look the other way if an employee is not meeting expectations. While most HR professionals would disagree with this practice, they would have to admit that it is not uncommon in many organisations. There is a general reluctance to rock the boat and cause bad feeling in the company when things are going well.

In times of recession it makes financial sense for managers to carefully scrutinise the performance of existing employees to identify those that may be holding the organisation back from achieving its long term goals. In cut-throat times no organisation that wants to survive can afford to carry its weak employees who consistently fail to meet performance expectations. Now would be a good time to replace the poor performers with a better class of employee. Rather than simply laying people off and surviving the storm, a forward thinking organisation should be thinking of hiring top talent now and building a strong, solid organisation.

What makes an economic slowdown a good time to hire employees?

In some ways a recession could even be considered a more favourable time for recruitment.

  • There are usually a lot more options for hiring and a lot of candidates to choose from due to other companies making redundancies.
  • Companies in dire straits could even be forced to let go of their most talented employees giving recruiters the chance to take their pick of top performers from the job market.
  • Even if they are not laid off, employees of companies in trouble may be more receptive to offers received by competitors.
  • The recruitment budget need not be huge as there are fewer competitors and even a small campaign aimed for a niche audience can have a big impact.
  • Organisations can use this lean period to re-negotiate their contracts with recruitment agencies to their benefit. A slow job market also puts them in a weaker bargaining position and they are much more willing to accommodate their clients’ demands.

Beware of the potholes

It is not all good news though. Managers need to make the decision to hire during a recession after thoroughly scrutinising the situation the organisation is in. Any investment, however small, must be thoroughly weighed against its returns and benefits for the company.

Other points to look out for:

  • The very fact that there is a big pool of potential employees could prove to be a problem if the HR department is not prepared for a high volume of applications. The job advertisements need to be planned so that the administrative aspect of the job campaign can be managed.
  • A difficult job market can affect different people in different ways. Instead of thinking of a new job as an opportunity, some individuals might be too nervous to make the switch. It would therefore be up to the recruiters to inform them of recent growth of their organisation and future plans. The potential employees need to know that their new employers would be a safer bet than their current ones.

There is more than one way to recruit

Even if an organisation does decide to take advantage of the current situation and go ahead with taking on more staff, they might have to look for ingenious ways in order for this decision to be financially viable. As a recent article in The Economist (May 2 – 8 2009) points out, companies are hiring in many different ways to suit the economic climate.

This includes:

  • Hiring interim staff on a temporary basis for example as consultants and freelancers. Typically this is for a period of one month and up to one year. This option provides employers huge savings in terms of employee benefits and helps them to delay hiring decisions till thing start looking up. The temporary hires also benefit as they gain meaningful work until they can find a full time position.
  • Another alternative is to offer deferred start dates to new hires, which gives them six months to a year before they actually start work. The employees can use this opportunity to travel or fulfil any other long term ambitions with the knowledge of secure job waiting at the end of it. Some companies like Credit Suisse, even offer around six months’ salary to new starters who agree to join a year later.
  • Some cost conscious firms are reducing their recruitment budget in novel ways for example by contacting potential employees through social networking sites like LinkedIn and Facebook.


Instead of seeing a recession as a time to bury their heads in the sand, HR Managers can use this opportunity to revisit the staffing situation in their organisations, and taking appropriate measures to ensure that they are poised to take advantage of the upturn as and when it happens. Instead of seeing a slow job market as a hindrance, resourceful organisations can take advantage of a bigger and more talented pool of prospective employees to build up a more efficient and productive workforce for the future.

Read full story

Topics: C-Suite, Talent Acquisition

Did you find this story helpful?



How do you envision AI transforming your work?

Your opinion matters: Tell us how we're doing this quarter!

Selected Score :