3 Ways to Hire During a Recession
Everything—from goods and raw materials to wages and interest rates—is rising due to high inflation. More economic indicators indicate a recession. During a recession, you must hire more efficiently to maintain your business.
Monster’s economist Giacomo Santangelo said, “What happens during a recession is the economy slows down, production slows down, unemployment increases, which slows production even further. He says GDP will fall there.
Santangelo says employers must cut costs and improve efficiency to survive. In a recession, employers can use strategic efficiencies to manage and hire.
Upskill Workers to Meet Market Demand
Santangelo says recessions affect multiple industries, companies, and organisational departments. As business needs and priorities change, companies should reskill or upskill their workforce instead of hiring during a recession.
Monster’s Future of Work report found that companies plan to stay competitive over the next three years by offering skills training. Retraining an employee is cheaper than hiring and onboarding a new one.
Santangelo says, “When firms need to hire someone new, that’s a new salary, that’s more benefits, and that’s more money you have to spend. However, if you have a staff member you can train, you can increase their duties. If you can, you do.”
If you must cut one area, train workers in other departments where you can use good employees who know your business.
Contract or Part-Time Workers
In a recession, employers may hire multiple part-time workers for the same job to save money. Santangelo says firms can hire part-time, freelance, per diem, or gig economy workers during recessions. “They cost less than full-time workers with benefits.”
As we approach a recession, gig economy companies may face few barriers despite labour shortages. Candidates are less selective about jobs. Inflation may lead some workers to seek a side job. According to a recent survey, workers are already doing this. The study found that 85% of workers have increased or plan to increase their gig work, with 58% citing inflation.
Work Remotely
The COVID-19 pandemic showed that some industries, particularly white-collar ones like business, finance, and tech, can succeed remotely. Santangelo says companies can save money by switching labour forces. “We discovered they can telecommute most of their workforce.”
In a downturn, consider remote work instead of bringing workers back on-site, where rent and building maintenance can hurt your bottom line. Remote work reduces overhead and hiring costs. Remote work can expand your talent pool to lower-cost workers. Working from home can keep your employees healthy and prevent costly production shutdowns as COVID-19 cases rise again.
Some Layoffs Are Unavoidable
Even with the above strategies, recessions can lead to layoffs. Netflix, Carvana, Wells Fargo, and others have announced layoffs, as we saw during the 1970s and 80s economic crisis.
Santangelo says the economy is like the 1970s. “Gas prices, food prices, grocery store rationing, and a general price increase may force employers to lay off people. When product prices rise and you have bills to pay, you have to lay off people, whether you’re Walmart or a local pizzeria.
Read Up on the Recession
There are a variety of strategies that can be used when hiring during a downturn. Some will be more applicable to your company than others, but the most important thing is to have up-to-date economic data and analysis available. It’s in this area that we can be of assistance. Connect with Monster and gain free access to professional insights, from the most recent economic trends and news to recruiting guidance and techniques.