Danger or opportunity? The impact of recessions on recruiting top staff

With the markets suddenly awash with people, is it easier or actually more difficult to hire true talent in recessionary times?  

The Chinese character for crisis is the same as the one for chaos – and includes two elements – one meaning ‘danger’ and the other ‘opportunity’. For the savvy organisation, the current economic downturn has created a unique opportunity to attract high level key personnel, the likes of which would not otherwise have been available in a more buoyant market.

Craig Coverman believes now is definitely a good time for organisations to ask themselves if they can really offer candidates compelling reasons to join them

So – first the good news

As the global credit crisis forces talent onto the global job market, candidates are obliged to look further a-field if they are to continue to work at the same level. According to Comm. earlier this year, 100,000 telecoms candidates had already lost their jobs – 84 per cent of them from within the US and EU markets. The Middle East and Africa emerging markets are therefore likely to be much more attractive to candidates now than their struggling mature home markets. We believe the skills shortages in the MEA region should become less acute as companies have a much greater choice of candidate – and, if played right, the pendulum could finally swing towards the region, permanently perhaps.

We also expect to see a raising of the bar in 2009, with a real focus on the quality of hiring. In a recent Linked-In survey, almost 20 per cent of companies said they would be hiring selectively this year – spotting opportunities for strengthening their teams as outstanding candidates came their way. This should be happening anyway, as this current economic crisis will have a lasting effect on the telco landscape – with fewer players in each channel – and with consumers making long-term changes in their attitude and expectations.

So, on the face of it, the recession should be a good thing for organisations, with a re-focussing on quality and generally more candidates about …. particularly global ones.

But here’s the rub

Firstly, quantity does not mean quality. Just because there are more candidates about, does not mean you necessarily want to hire them. In this market, even more so than in an average market, you’ll want to hire the real superstars – those that can truly make a difference. However, the superstars are keeping their heads down.

We expect most exceptional performers to stay put in 2009 and only move unless they have a truly compelling reason to do so. Amazingly, we’re seeing companies attempting to ‘buy back’ their top stars if they attempt to leave – highly unusual behaviour in what is supposed to be a recessionary market – and a feature of a market still dogged by difficulties in attracting top talent.

That said, in a recent Linked-In survey, as many as 45 per cent of potential candidates said that this year they would be sitting tight in their current roles (unless they had to) due to market uncertainty. The expression “better the devil you know” springs to mind. This may result in organisations needing to look more at the ex-pat workforce than the local or regional one – so, bizarrely, ex-pat hiring may well increase this year percentage-wise, instead of decreasing. And when we say ex-pat, we’re talking about bringing in fresh blood from abroad – not ‘localised’ ex-pats. The current market has done a good job at shaking out many of the not-so-strong performers – with many ‘local ex-pats finding themselves out of work for up to 8 to 9 months … before finally moving back home (see Dubai Summer 2009).

However, now is definitely a good time for organisations to ask themselves if they can really offer candidates compelling reasons to join them. If not, and you need to be honest with yourself, the advice is to work hard to put those reasons in place. In fact, many organisations are currently focusing on their employer branding, even in these tough trading conditions – and in readiness for when the market turns.

It’s also worth considering your own personal vulnerability – as your own role may not be as safe as you might think. The harsh reality of this market is that many organisations will be reviewing all their functional teams, top-to-bottom, to ensure they can meet the demands of an increasingly competitive marketplace. Even the ‘c’ level team’s performance won’t escape careful analysis – and we expect to see significant churn at the top – in a market already known for having, at 21 per cent, the highest level of CxO attrition across all industries.

So – will this period be a dangerous one for your organisation or one full of opportunity?

We cannot answer that – we’re seeing some organisations steam ahead in this market through careful, well considered and executed human capital strategies – and others that are quite literally falling apart. What we can say with great certainty, though, is that the same rules apply now as they did before this current madness started – namely, that it’s people that make the difference. You need to review your hiring and on-boarding processes … realistically. Do your recruitment policies and processes help you or hinder you from attracting the very top talent you proclaim to want in your business? Do you have proper development, retention and succession plans in place – or, again, do these actually hinder you from retaining the very top talent that will help drive your organisation forward?

Get this right – and you’ll definitely see the benefit when the inevitable market resurgence comes – leaving your competition in the wake.

Craig Coverman is CEO of executive search firm Eutopia