2022 has seen its share of ups and downs. A year that started with endless discussion among hiring teams of the Great Resignation and the phenomenon of Quiet Quitting in the workplace has shifted to a recession watch. A confluence of issues, including the rising cost of goods (i.e., inflation) and slowing economic growth, are threatening to push countries around the globe into recession.
The World Bank warns that “Unless supply disruptions and labor-market pressures subside, those interest-rate increases could leave the global core inflation rate (excluding energy) at about 5 percent in 2023—nearly double the five-year average before the pandemic.”
Companies - particularly in the tech sector - have responded by tightening their belts, instituting hiring freezes, and laying off workers. Despite the slowdown in hiring, medium- to long-term talent acquisition needs have not changed as companies continue to automate various business processes and innovate service offerings in the digital age.
The latest CompTIA Tech Jobs Report shows that remote and WFH job postings in September declined by 14,297 compared to August - although tech employment in PC, semiconductor, and components manufacturing, telecommunications, data processing, hosting, and related services, other information services such as search portals, and IT and custom software services increased in the same period.
Unfortunately, hiring teams are not immune from the chopping block. Recruiter layoffs and hiring freezes at Apple, Twitter, Meta, and Snap have been widely reported as a measure to address slowing economic growth.
These announcements have largely been seen as a harbinger of the approaching downturn. Indeed, these events are a notable turn of events for hiring teams, given the high demand over the last several months for tech professionals to fill vacant roles. However, a lot of unknowns remain for economists and industry analysts since indicators like unemployment and market dynamics are not the same as in previous recessions.
For tech recruiters, getting the pink slip in the current environment does not have to be a disaster. Instead, it should be viewed as an opportunity to reassess your skills and recruitment specialties, deepen or expand network relationships, and consider forging a new path with your own hiring team. After taking time to get over the initial shock and disappointment, take these steps to regroup and move forward.
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Despite slowing growth and a looming recession. There will be companies looking at the current environment as an opportunity.
As McKinsey notes, “in a higher-for-longer [inflation] environment, companies should also be thinking about more structural solutions that not only manage costs but also build resilience and can drive long-term value creation.” The consulting firm outlined these structural solutions as:
Previous downturns have told companies that hunkering down and waiting for the storm to pass is not the answer. Instead, many organizations may invest in transforming their business operations so that it is stronger when the market improves - and that will need to include talent acquisition in some form (i.e., temporary, permanent, outsourced hires) conducted by experienced hiring teams.
While the tech industry may be your specialization and hiring is slowing or halting for some companies, there may be opportunities to use your experience in other sectors. Digitalization has expanded the need for tech professionals in non-tech sectors. It could be worthwhile to look at non-tech companies as they are hiring more tech professionals to drive digital transformation projects.
According to the same CompTIA report referenced above, the top industries posting tech jobs aside from professional, scientific, and technical services are finance and insurance, manufacturing, information, and retail trade. Companies in these industries may be seeking to add tech recruiting professionals with deep network relationships to their hiring teams or as consultants to formulate the right talent acquisition strategy.
This would also be a great time to tap into your professional networks. Reengaging with your networks and maintaining communication is crucial to deepening relationships in good times and bad. You may learn about former candidates who have moved on to new opportunities in different industries and uncover opportunities to gain experience placing candidates in other industries.
A layoff can also be a great time to evaluate your own skillset and seek out courses to update your skills. As trends like virtual hiring take off, it will be important to brush up on video conferencing skills and refine talent acquisition tactics to secure the best people for a vacant position without an in-person meeting. Data analytics capabilities will also be essential as more hiring teams adopt tech solutions to streamline recruitment processes. According to the World Economic Forum, half of all employees worldwide will need significant reskilling or upskilling by 2025. Tech proficiency is especially critical for hiring teams as more processes include the use of software and require specific digital skills.
Taking this time to invest in yourself will make you a stronger asset to hiring teams in the future - should you choose that route. Some great sources for training include LinkedIn Learning, the Academy to Innovate HR (AIHR), the Human Resources Certification Institute (HRCI), sites like Udemy and Coursera, and professional associations such as the Society for Human Resource Management (SHRM), the American Staffing Association (ASA), and the National Association of Personnel Services (NAPS). Another path may be striking out on your own and creating a new recruiting agency.
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This is a big decision to take but could be a highly rewarding choice. Starting a business of any kind is risky - especially if the economy enters into a recession. Despite this obstacle, take some reassurance from the fact that the likes of Electronic Arts, Microsoft, Slack, and Airbnb were created during such times and have gone on to thrive in their industries.
Another issue that is in your favor is that it has been crucial for recruiters and hiring teams to adapt to job seekers’ changing expectations and adopt new methods of sourcing, interviewing, and hiring talent - given the seismic changes to talent acquisition and labor markets since the pandemic. This makes it an incredible time to offer a fresh offering to potential clients. There are several factors to evaluate before opening the doors of your new enterprise.
The first is determining your business’ niche or area of expertise - especially compared to your competition. These decisions should be based on your strengths, your existing candidate network, and an understanding of market needs - today as well as in the future.
Identifying gaps in recruitment agencies’ services can also help you develop a useful niche that will allow your agency to stand out as a newcomer. Establishing a unique brand identity and value proposition will also go a long way in helping you succeed in a challenging market.
Another important consideration before starting a recruiting agency is your finances. Starting a business can be expensive, so it is critical to have a clear view of all the potential expenses involved in starting up the business and in keeping it in operation. Creating the fee structure beforehand is also prudent to make sure that there are no flaws in your business plan.
The costs of recruitment operations such as posting job listings, purchasing a LinkedIn premium subscription, joining professional organizations, marketing and IT support can add up quickly. Setting goals for the first few months and years of the enterprise will keep you focused on meeting specific goals. Additionally, a marketing budget for the first year will also ensure that spending to promote the business does not get out of hand.
Investing in tech solutions from the beginning can make your recruiting process and client management efficient and nimble, which will be essential as a new business. An applicant tracking system (ATS) or recruitment CRM like Manatal can take valuable time out of your recruitment process so that you can focus on developing your business and hiring teams. However, these are far from the only types of SaaS solutions available to help recruiters run a business smoothly and focus on getting results for clients.
As your business grows to include employees, the technology will make it simple to scale your operation. Multiple hiring teams will be able to hit the ground running - even if they are working remotely - and maintain a consistent approach across your business.
A layoff can be disappointing, but it can also be the beginning of the next phase of your career. Taking a step back to assess the market, your skills, and what you might like to do next can be instrumental in defining your next steps.
The next hiring team you join will be greatly augmented by the experience you bring to the table - particularly if you take a moment to upskill. Alternatively, if you opt to strike out on your own, it is an exciting time to get a new business off the ground.
Recruiters have multiple ways to navigate the current environment because of the number of companies that still need to hire to get back to 2020 levels, address skills gaps, and fuel strategic plans. It just requires agility and some outside-the-box thinking before jumping back into the job market.
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