Recruiting in times of economic uncertainty

Uncertainty seems to have been the prevailing trend in the British economy in recent times. After a turbulent period following the 2008 financial crisis, households and businesses getting to grips with a programme of austerity, technological change and the seismic political upheaval of Brexit, the British economy now faces the unprecedented challenge of a global pandemic. Economic cycles are to be expected but rarely do challenges like these take place in such a short period of time.

There had been some signs of cautious optimism. Between October and December 2019, employment increased by 336,000 taking total employment to a record high of 32.93 million. Average real wages had finally recovered to pre-2008 levels, regaining the losses wrought on income following the financial crisis.

However, even before the devasting effects of the Coronavirus had been felt, there were signs of an emerging slow-down, with economic growth slumped at its lowest level since 2010. Lingering uncertainty around Brexit and its implications for the labour market have impacted business’ hiring strategies.

Whilst the human cost of a national emergency and economic downturn are profound, businesses will need to be proactive during this time and there may be potential to turn challenges into opportunities.

 

26 March 2020

 

Talent attraction

Companies with strong brands and reputations are well placed to attract potential candidates over their competition. Marketing budgets are often among the first to be reduced during a downturn, but companies retaining a strong presence by investing in their brand will capitalise on this by attracting talent.

Companies with the foresight (and cash-flow) to maintain or even increase recruitment, bucking the cost-saving trend, can make inroads into planning for growth. Recruiting early in anticipation of recovery can set them apart from the competition, picking up high-quality candidates that will fuel growth into the future.

Seizing opportunities for scarce skills should also be a high priority. Talented, high-skilled candidates like technical accountants and developers may be in circulation and businesses should take full advantage. This means identifying key roles early and adapting quickly to the environment.  HR departments that are proactive rather than reactive, stand to gain.

Accessing the contract market

Self-employed workers already make up around 15% of the labour market in the UK. During a downturn we would expect to see this increasing. Businesses can access the contactor market and use this this to upskill their workforce by recruiting highly skilled specialists for project work or on a fixed-term basis. This allows the flexibility to adapt to current organisational demand without committing long-term resources to payroll. Contractors often bring in a range of expertise drawn from broad experience and this can help create synergies with existing staff.

A buyer’s market?

Inevitably during a recession there will be redundancies and lay-offs. The candidate pool is likely to grow significantly, and some businesses are well placed to be picky. As labour supply increases, candidates may be more amenable to accept lower wages or relocation. However, this strategy can backfire come the recovery, as competitors begin to compete on higher pay and incentives. It can be a tricky balance between capitalising on a favourable hiring environment and offering the competitive packages that would inspire loyalty and longer-term retention.

Flexible working

Uptake of flexible working practices has been a growing trend for some time. Adaptive businesses find they can utilise flexible working practices like reduced hours, part-time, school hours, or term-time working to reduce their cost base, whilst reaping the benefits of flexible worker’s skills and experience, and additional benefits around retention rates and productivity. Flexible workers report higher job satisfaction and greater health and wellbeing compared with their non-flexible counterparts. 

 

Flexology provide recruitment, training and consultancy services, we’re proving that flexible working attracts the brightest & best candidates. If you're looking to make a move into a fulfilling role that gives you the right amount of flex or are a business keen to open up your pool of potential talent and improve diversity or require advice on flexible working then please contact me, owen@flexology.co.uk / 0117 214 1224 / www.flexology.co.uk