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 situations.

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 employee investment.

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 the future.

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.