Recruiting During an Economic Downturn

money squeezeWhen a company’s financial performance declines, or worse, a widespread economic recession hits, companies and employees alike face an uncertain future. Perks decline, potential layoffs may loom, and the relationship between organizations and employees becomes strained as anxiety takes hold. External recruiters can also be negatively affected by this situation by a decline in job postings. However, it also presents an opportunity for them.

External recruiters’ expertise is their currency. Their role gives them a unique perspective of the job market: they have connections industry wide, both on the company and candidate side. As a result, recruiters are positioned to take on an even larger role when the economy becomes a question mark – staffing consultant. They have a big-picture view of what’s happening across an industry, and have their finger on the pulse of where the talent is and what it will take to bring them on, which becomes instrumental when a company needs to run on a lean staff – having the right people on board is vital.


It’s clear that recruiters can play an invaluable role during a financial lull – whether it’s a company crisis, an industry-specific downturn or the economy at large is in stasis – and so here are a few things recruiters should keep in mind to thrive during times of economic instability:

Relationships really matter. Successful recruiters are well-connected in the industries they serve. These relationships become essential when a recession hits or an industry experiences a hiring freeze. Candidates and clients want to know what’s happening and what to do to prepare themselves for the future. Recruiters will receive an uptickof inquiries from employees concerned about job security, asking if they should update their resumes and begin to look for back-up opportunities, and companies will be reaching out to determine how to organize their staffing to ensure the right people stay on until business resumes as normal.Be ready to do some hand-holding for clients and candidates alike. Both will be looking for guidance on how to react to market forces. With a 10,000 foot view of the job market, recruiters can provide strategic guidance on how both parties can weather the storm.

Help companies make tough decisions. If it gets to the point where companies are issuing significant layoffs, they’ll often ask for assistance in providing career counseling and advice to these employees. It’s not uncommon for staffing firms to get involved at this stage, and it’s another way to play the role of the advisor while extending your network. The connections made during this uncertain time will lead to opportunities in the future when the economy improves.Recruiters should dedicate significant time to reaching out to companies during economic downturns as a way to both build trust, and strengthen relationships on the client and candidate sides for the future.

Direct candidates to contract work. Even in the midst of an economic downturn, companies need employees, and to hedge against the high overhead associated with full-timers, many look to fill positions on a temporary basis. According to a recent Addison Group survey examining contract hiring trends, 41 percent of hiring managers say that one of the main reasons they hire contractors is lower overhead costs. As a recruiter, counsel candidates on being open to these opportunities and educate them on the many benefits the contract market provides. Contract work can seem less stable to those unfamiliar with the details, but it’s often the best option for those wanting to stay in the job market.

An economic downturn means candidates are nervous about their job prospects, while companies face cutbacks in their existing workforce on top of uncertainty in existing hiring decisions. Recruiters’ability to remain agile and serve both clients and candidates during this time will strengthen their relationships, an essential asset, and pay dividends down the road.

When the hiring market shrinks, recruiters who can shift their role to that of consultant – someone who can balance advising organizations on overall employment needs and candidates on how to approach the job market – will be a critical commodity in any economic climate.

MORE: Is direct sourcing the next big thing?

Hailey Canon

Hailey Canon
Hailey Canon is regional vice president of Addison Group's finance and accounting practice.

Hailey Canon

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