Does it make sense to hire in a down economy?
Not for all companies, but for the stronger companies, definitely.
First, a little disclosure: I own and manage an executive recruiting
company. I make my living by helping my clients hire top-notch talent
. . . but that's only part of the story. I help my clients build
their businesses by bringing them candidates who can generate maximum
revenue from their sales efforts or who can fulfill roles essential
to working on the largest and most profitable projects. Without
my candidates, my clients wouldn't be as successful.
Enough about me, you are reading this because you are trying to
decide if you should hire when the economy seems to be struggling.
I know, because I'm doing the same thing. I'm looking ahead, trying
to guess when growth will spur optimism, and optimism will spur
more growth. That's how it happens. Just like downturns in the economy,
we've all seen it before, and we'll all see it again.
In a downturn, there are two types of companies: those who should
be worried and those who should be cautious. Those who should
be worried probably shouldn't hire, while those who should be cautious
should consider hiring, maybe even from the struggling companies.
I speak with employers every day. They are afraid that their revenue
streams will dry up, and that their cash and credit will disappear
before their income recovers. These are very valid reasons. If you
are operating on next month's revenue, needing everything to go
right for your business to continue, you probably better focus on
what's already on your plate instead of looking forward to dessert.
If, however, you are positioned where you can run lean for a few
months, in case your revenue happens to slip a little, a downturn
in the economy can create hiring opportunities.
Adding to your payroll as your income heads in the opposite direction
might seem counter-intuitive, but it makes sense in a number of
1. When the economy improves, some of your competitors will be
gone or wounded, and projects put on hold will suddenly appear,
most likely, with urgency. Will you have the best team ready
to step up and take advantage of these opportunities? Will you
have the staff on hand to bid on and win the projects that will
launch your company to the next level? Will your sales team have
nurtured the market to position your company for huge jumps in revenue?
I recently more than doubled the number of recruiters in my office,
knowing that my clients will emerge from this challenging time with
fresh, urgent needs, and that fewer of my competitors will be around
to challenge us for that business. I don't want to find myself desperately
searching for recruiters to help me take advantage of the next upturn.
If I do, a better-positioned firm might beat me to the punch.
2. A downturn provides a good opportunity to critically examine
your current workforce to decide if you are putting the best players
on the field. We don't like to see anyone lose their jobs, but companies
need to make sure that they are getting the best return on their
Look at your current team and ask yourself what would happen
if you replaced the low performers with high performers. Especially
in a challenging economy, you need to capitalize on every resource.
Just like replacing a leaking window that hurts your heating and
air conditioning costs, you need to look for ways to minimize cost
and increase your revenue with your payroll both today and into
3. Some highly desirable candidates who were previously too
comfortable to move are now worried about the future of their current
companies; however, they aren't going to come to you without
prompting. Remember those companies who should be worried and probably
shouldn't hire? Their employees are also worried. They are worried
that the next downsizing headline will be a lot more personal.
Those employees are also worried that if their employer finds out
that they are looking, they will be the first ones cut. For that
reason, they aren't going to send out their resumes, and you aren't
going to find them without using an aggressive recruiter who will
reach out to them with your opportunity and who perhaps already
has a relationship with them.
There is no doubt that this is a challenging time to be in business,
but challenges create opportunities, and if your company is strong
enough, you can emerge from this even stronger and with employees
that your competitors will envy.