An economic crash may be on the horizon – How should recruiters prepare for a downturn in the job market?

I started my recruitment career in November 2007. At the time, the market in the UK was still buoyant with recruiters smashing targets and recruitment companies hiring like crazy.

However, dark economic clouds were already looming across the pond. The FED had been raising interest rates for the previous few years to curb inflation, bringing an end to the housing bubble and kick starting what is now known as the credit crunch and great financial crisis.

With Bear Sterns collapsing in March 2008 and then Lehman Brothers in September 2008, it wasn’t long before the world was gripped by the great recession.

I remember it well; I was recruiting for white collar roles within the construction sector. It almost felt like overnight we went from having hundreds of jobs and frantically trying to hunt candidates, to having no jobs and piles of CVs on our desk with nowhere to send them (Many were the star candidates which had been ignoring our calls previously).

We soldiered on for a while, but the situation soon became untenable and our company of around 25 staff downsized to less than 10. Unfortunately, I was one of the casualties that was made redundant.

I was new to the industry and ill prepared to handle recruiting in a recession.

14 years later, there are a number of the same dark economic clouds above and the general sentiment is that a recession is coming. How bad it will get, remains to be seen.

The signs are already there

Recruitment can be a tough gig at the best of times, and it’s rarely been a better time to be a recruiter than the past few years. For a lot of younger recruiters, they have only ever worked in a job heavy, candidate driven market.

When things change, you must make sure you are ready.

If you think it’s hard now, I’ve got some bad news for you; It's even harder when a recession comes.

The signs are already there; Inflation is rampant, interest rates are being raised around the world to try and curb it, stock markets have tumbled, several high-profile companies have downsized in recent months both globally and here in Thailand, and I’ve spoken to others who are freezing recruitment due to the global economy.

Candidate sentiment could soon change with people being reluctant to move jobs due to their confidence in the job market and economy. Employees that are last in, are quite often first out when redundancies happen.

The domino effect happens quite quickly and before long it can go from having lots of jobs and no candidates, to no jobs and loads of candidates.

How can recruiters prepare for a downturn?

To quote Greg Savage “You fix the holes in your roof when the sun is shining”.

It’s important to plan and not get complacent, being busy and having jobs to fill is not a good excuse!

In this period of economic uncertainty, it is more important than ever to create a robust pipeline of top talent so that you’re not caught off-guard when things get tough. It’s also important that you stay on top of your competitors by making sure your key clients come to you, and not them when the downturn happens.

If you haven’t already done so, start strengthening your network now. Don’t wait until there is an opening at one of your clients or prospect before reaching out to them—connect with them now so they know who you are, and what value you bring if/when they need help finding someone new.

Covid has made recruiters lazy and content to sit at home and forget about face-to-face meetings. It is vitally important that you have solid client relationships, these are built in person and not over the phone or online.

When did you last meet your top 10 clients in person? Make it a priority to do so.

This isn’t limited to clients either, make it a priority to be meeting the best candidates in the market too. Your network or lack of, will be the difference when the market changes.

Sharpen your business development skills

No this does not mean lowering your fees to undercut the market, which is unfortunately what a lot of companies’ do in a market downturn.

What is your USP? What makes you different from your competitors and why should a company work with you?

Can you sell exclusivity? Can you sell retained? Can you negotiate, properly?

Most recruiters I’ve seen in Thailand think business development consists of sitting on job boards and messaging the companies advertising to see if they can work the job. Worse than that, a great number of recruiters are reliant on being given jobs by their manager and possess no real business development skills at all.

If that sounds like you, then I would highly recommend speaking to your manager about upskilling yourself in this area.

If you don’t, when the downturn comes, you will be most at risk.

Develop a personal brand

The modern-day recruiter needs to be known both offline and online and developing a personal, or online brand is integral to standing out from the crowd.

In a downturn, this is especially important. With limited work available, a company will really need to trust the recruiter they choose to engage with; by having a strong personal brand, you can demonstrate your abilities and credibility, and this will elevate you above the competition.

People buy from people, get your personality across and share a mixture of personal and professional content. Engage with people in your sector, write articles, post videos, do podcasts, but most importantly think of interesting topics your target market will want to engage with.

Continue to push yourself and get out of your comfort zone

If you want to survive a recession, the most important thing to do is to keep pushing yourself. You'll be up against many challenges, but you can overcome them if you're willing to work hard and be creative.

Be proactive: Start thinking about how a downturn might affect your business or industry. What can you do to make sure that you can survive, remain relevant and still be around when things improve? How can you help ensure that clients are happy with their experience working with you? What new products or services could your organization offer during this time?

 “Insanity is doing the same thing over and over and expecting different results”, so be creative and push yourself outside your comfort zone and try new things. Often the things we like doing the least, are things we need to do more of, so think about what else you need to do.

Maybe it’s networking events, perhaps it’s meeting candidates and clients face to face, or it could be building a personal brand and posting content online.

The transactional recruiter will be buried during a recession so start upping your game right now.

Conclusion

There are many signs that we will be entering a market downturn and recession soon. Recruiters will need to adapt and start raising their standards. This means focusing on what you can offer and what makes you different, instead of just the jobs you’re trying to fill.

Get closer to your key clients and candidates, sharpen your business development tools, build a personal brand, and be prepared to work smarter and harder.

As Warren Buffet famously said “It’s only when the tide goes out that you learn who has been swimming naked”