Are we in a recession right now? Or maybe . . . we’re not? Are we in one and we just haven’t been told yet? This is all quite confusing.
However, one thing that is not in doubt is that there will be a recession eventually. It’s a historical fact. So whenever it arrives, professional recruiters and search consultants must be prepared.
The good news (if there is good news) is that many recruiters have endured recessions in the past. This includes the Great Recession, the worst economic downturn in the United States since the Great Depression.
And since that’s the case, those recruiters can take what they’ve learned from the past and apply it to the possibly near future.
Recession and recruitment: effective recruiting in a recession
And to help us do just that is Bill Radin, a top-producing recruiter whose innovative books, tapes, and training seminars have helped thousands of recruiting professionals and search consultants achieve peak performance and career satisfaction.
Bill has a list of 10 things that professional recruiters and search consultants should know about the next recession. (If you’re a recruiter and you’ve never endured a real recession, then this is especially applicable.)
1. Jobs that made you rich in good times can make you poor in a recession.
That’s because you actually had search assignments for those jobs in the good times. Now, during a recession, those jobs no longer exist. It’s a “Who Moved My Cheese?” moment, if there ever was one. Needless to say, there will be less cheese.
“This is especially true with mid-level positions in which duplications in skill sets or job titles exist within a single company,” said Radin.
2. You may need to switch from a “delivery” business model to a “value-added” model.
Truth be told, you should be focusing on providing top-tier value all of the time, not just during a recession. But of course, when times are good and the job orders are flowing and the candidates are scarce, you’re trying to deliver every viable candidate you possibly can.
“If your business depends on delivering mass quantities of average-quality candidates or you do little to add value, you’ll find it harder to compete,” said Radin.
3. Some job markets and desk specialties will be spared.
This always seems to be the case, fortunately. The trick is knowing which markets and specialties will be spared and making sure you’re working in those markets and specialties when everything goes sideways.
According to Radin, a case in point was 9/11. While job cuts were rampant across the board, certain job markets, such as Defense Contracting, Construction, and Legal Services, actually thrived.
“If you can identify the markets left standing, they can be your lifeline,” he said.
4. The greater the supply of “active” candidates, the more valuable “passive” candidates become.
This might sound counterintuitive, but it really is not. During a recession:
- If an employer is hiring, that employer will only select a candidate if that candidate truly represents superstar talent.
- When employers make cuts to their staff, they typically do not cut their superstar candidates, meaning those candidates are still employed.
- Superstar candidates are usually passive candidates during good economic times and become even more passive during tough times.
We saw this phenomenon during the Great Recession. And although it does not exactly appear to be fair to “active” candidates, it is an indication of what has happened in the past.
“Since layoffs flood the job boards with unemployed or marginal candidates, you’ll need to brush up on your cold calling skills and find creative ways to source top-flight candidates who are currently employed,” said Radin.
5. Employers are more cost conscious.
This, of course, makes perfect sense, and you must prepare for the inevitable. Clients willing to pay 25% and 30% fees on candidates may become rare. And of course, if you thought clients were “dragging their feet” before, they’ll practically be digging in their heels.
“You can expect more pressure to reduce your fees and for hiring cycles to slow to a crawl,” said Radin. “And as more recruiters fight over fewer jobs, you’ll need to tighten up your ‘ownership’ rights to candidates. Otherwise you’ll fight more frequent battles over who gets paid.
6. Candidate marketing will become more common.
This is another reason why candidate “ownership” is important. The bottom line is that talent trumps everything, especially the top talent. We’re talking about the top 5% of the candidates in the marketplace. Sure, there’s a recession, and sure, employers don’t want to hire the wrong person. But if they know for sure that your candidate is the right person? They’ll “move things around” to make it happen.
“Most employers will throw out the rule book if you bring to their attention a candidate who can make an immediate, positive impact,” said Radin. “If the candidate has enough sizzle, employers will find a way to make the hire, even if they have to create a special position.”
7. Your time management becomes more critical.
Time management is always important. You want to work on the job orders and search assignments that will lead to making placements. However, time management mistakes are easily forgiven by a booming economy and hot job market for hiring. This is substantially less the case during a recession.
“With fewer positions to work on, you’ll need to be highly selective about which assignments will give you the greatest return on your investment of time,” said Radin.
8. Weaknesses in your selling skills are more exposed.
Just like you can cover up time management errors with a hot job market, you can mask other weaknesses, as well. A recession places those weaknesses under the white hot glare of scrutiny. For better or worse, a recession is considered a “fitness test” for recruiters. You’ll find out just how good you really are.
“Recessions leave little margin for error,” said Radin. “The better you are at qualifying, closing, handling objections, and making presentations, the more efficient you’ll be with respect to converting activities into income.”
9. A recession is the best time to be in the recruiting business.
Speaking of a recession being a “fitness test,” there’s good news for elite recruiters in the profession: the non-elite recruiters eventually stop being recruiters. The ranks of the profession tend to swell during good times and contract during bad times. Call it a cleansing, if you will.
“Look at it this way,” said Radin, “when times get tough, the weaker recruiters will wash out with the tide. If you can weather the storm, find ways to gain market share, and build your reputation, you’ll be positioned to grow as the market recovers.”
10. Cash flow is everything.
With placements difficult to come by, any way that you can generate revenue during a recession is a good way. There are two basic ways to increase revenue: cutting costs and closing deals.
“Learn to control your spending or make cuts in your budget,” said Radin. “Otherwise, you might end up working with ‘your back to the wall.’”
If direct hire deals are not forthcoming, then perhaps making contract placements can help to generate cash flow. Our friends over at Foxhire (formerly Top Echelon Contracting) can tell you all about it.
Recession and recruitment: the value of a split network
While working a “blended desk” of both direct hire and contract placements during a recession is a good idea, so is joining a split network. When you’re the member of such a network, you have access to other recruiters’ job orders and candidates in a blinded fashion. Network recruiters work together to complete search assignments and make placements they would have not made otherwise made.
Top Echelon Network has been in existence since 1988. We’ve been through every recession since then, including the Great Recession. We know what happens to the recruiting profession during downturns, and we know what recruiters need. What they need are job orders to work, and by leveraging the resources of their Network membership, they can access those job orders.
Countless recruiters have told us down through the years that their membership in Top Echelon’s recruiting network “saved their bacon,” so to speak. (And the last thing you want when somebody has moved your cheese is to lose your bacon, too.)
However, the best time to join a network like Top Echelon’s is before a recession hits, not after. In such a situation, time is of the essence. You can make the transition from working your own pile of rapidly dwindling job orders to working your split recruiting partners’ jobs.
Click HERE to apply for membership in Top Echelon Network!
It’s true that a recession contains plenty of adversity. But as some recruiters know, there is often opportunity in the midst of adversity. And with that line of thinking, I guess you could say there is plenty of opportunity in the midst of a recession. Bill Radin certainly thinks so.
“There’s no doubt about it: a recession is a buzz kill,” he said. “But it can also be a great teacher, because it humbles you and makes you more aware of your weaknesses. If you can stick it out and learn from your mistakes, you’ll make ‘tons of hay’ when the sun shines again, and you’ll be more immune to future recessions.”
(Editor’s note: You can reach Bill Radin toll-free at 800.837.7224 or via email at billradin@billradin.com. You can also visit his Web site at www.billradin.com.)