Recession and Recruitment

The recession is a bad time for doing business and to meet the targets. A lot of companies have to disappear and many companies are not ready to use the recession as the best opportunity to grow.

The recession allows the HRM Function to make a good mapping of the potential talents working for the competitors. When the HRM Function cooperates closely with marketing and sales functions, it can easily target the employees. As the competitors can be in troubles, the employees are more sensitive to the offers received by the competitors.

The companies have to limit their recruitment budgets and they have no job opening widely available. The HRM Function working smartly can use this period as a time for building the job brand name on the job market. The budget for the job campaign does not have to be huge as the competitors are not present and the impact of the job campaign can be huge. The job brand name building can be seen as unimportant recruitment activity during the recession, but the companies start to hire right before the recession is over and spending is much higher then.

The recession is good for re-negotiating the recruitment contracts with recruitment and job agencies. The recruitment agencies are pressed by the decrease in number of job vacancies and they are worried about their future cash flows. When the times are good, the recruitment agencies do not want to make any changes to their contracts, when the recession starts, they listen very carefully to their clients to make them happy.

The recession is not just the time of cutting FTEs and firing employees out of the business. The smart company can use the period of recession for gains in the recruitment area to be ready for the next period of the strong economic growth.