Jun 29 2009
The Recession & The Effects On Staffing
This economy has affected so many of us in staffing. A large number of our friends and co-workers, myself included, have been victims of companies scrambling to find places to cut back on expenses. One of the first places they look to make reductions are the “non-revenue generating” internal positions – and unfortunately recruiting falls into that category during times like this.
It’s sad to me because finding talent, in my opinion, is a business essential – especially when you consider the cost of having a position vacant. Dr. John Sullivan once estimated that it could cost between $7,000 – $50,000 per DAY to have an engineering position vacant, and that in key leadership positions, the cost of vacancies could run into the millions for each week of vacancy.
So why do companies cut positions that are responsible for keeping these astronomical vacancy costs down? Well, in an economy such as what we’re experiencing today, companies look at the fact that they’ve placed a hiring freeze on operations, or the fact that they don’t have budget for the next few quarters to make many new hires, and at the top levels, the decision is made that as there will be little to no hiring made for the remainder of the year, the natural thing to do is to reduce the size of the staffing team.
I think this is very short-sighted mentality.
We are not going to be in this economic situation forever. History dictates this. Geoffrey H. Moore, former director emeritus of the Center for International Business Cycle Research, Columbia University, New York wrote an article back in the 90s examining the various recessions and depressions throughout US history. In his studies, he determined that of the 3 depressions, the average length of time was 24.6 months. His studies also found at the time that we went through 6 sharp recessions – average length of time 12.5 months; and 5 mild recessions – average length of time 9.6 months. Even though this information does not include recent recessions from after 2000, the information still paints a historical picture and lets us know that things will eventually turn around.
Most scholars and analysts have agreed that our present recession began in December of 2007. If that’s the case, we’re due for an upswing and I believe that it’s coming sometime this fall. But when hiring needs resume, who’s going to be there to fill all of the vacant positions, since so many corporations have laid off massive numbers in their staffing teams?
That’s where the agency recruiters come in. For those of you who can hang on through these turbulent times, you will have more work than you can handle when the economy turns the corner. Lots of corporations have been downsizing their staffing teams to bare bones; some completely eliminating them. When hiring resumes – most likely sometime this fall or winter – they’re going to be seriously hurting for people to help fill their needs. That’s where you come in – since there won’t be people in corporate staffing roles, companies are going to look to you for assistance, and you’ll have more work than you know what to do with. So hang on for the next several months and you will be rewarded handsomely.
As well, here is my advice to large corporations: this is the time when you need people building trusting relationships with future candidates. Letting go of your staffing teams during times like this will only come back to hurt you in the long run. Hold on to those people who are good at building relationships – because candidates will remember those people when things get better. I personally feel blessed to be working with an organization that embraces this idea about staffing.
Just keep in mind: this, too, shall pass. Recessions never last forever. There is a light at the end of this dark tunnel. Make smart business decisions – do not be penny-wise and pound foolish. Stay the course and never give up!
*disclaimer: I am not an economic scholar; these are simply my thoughts on the current situation based on my observations and my own personal experiences.
Simple and easy are often viewed as interchangeable words. But to me, they’re quite different. There are some who seem to think that using social media strategically for business is easy. I beg to differ.
Today marks the day I started my career in Internet Research, seven years ago. I still remember just like it was yesterday – I moved 1,000 miles away from everything I was familiar with to take my new job. I packed up my apartment in Tampa and threw about 2 weeks worth of clothes and other essentials (including my computer) into my Honda Del Sol, and heading up I-75 to Cincinnati on Friday, June 21st. I arrived in the evening the following day and settled into my brother and sister-in-law’s apartment. A couple of weeks later, my brother and I flew back down to FL to rent a U-Haul to get the rest of my stuff up to Cincinnati. We drove back up and packed everything into a storage unit where it remained until 2 months later. You see, it took every penny that I had just to move to Cincinnati, and my brother and sister-in-law allowed me to live with them until I had saved enough to move out on my own. I crashed on the couch until the end of August, when I finally was able to get my own place.
This past Saturday, I spent the day in Columbus OH attending