The Downturn Forces These Strategic Pivots In Recruiting

I argue that “rigidity during changing times leads to catastrophe.” Today’s changing business environment requires every recruiting function to avoid rigidity by making several pivots. Pivots are situations where you dramatically shift your tools, goals, and direction by as much as 180°. In my view, TA has no choice but to respond to the numerous shifts in business, health, and labor markets. After we pivot in these new directions, a new “adaptive recruiting function” will emerge. This new methodology will be measurably more adaptable, agile, scalable, and able to suddenly stop and pivot in any new direction. Unfortunately, I have found that most recruiting functions are already lagging other business functions like marketing, production, and supply chain, which are already making their required strategic pivots.

A Quick Example Of A Strategic Recruiting Pivot 

Perhaps, an example will illustrate the need for at least one pivot. When the unemployment rate was under 4%, most recruiting targets were fully employed. As a result, recruiting should have relied primarily on a sourcing strategy and tools (like employee referrals) that focused on attracting fully employed people. When the unemployment rate jumped fourfold up to 16%, smart leaders should have shifted away from passive sourcing tools and toward the less expensive sourcing strategy that targets “active candidates” (usually large job boards). The concept of pivoting when economic and talent market factors change is simple. When the current economic assumptions change, you automatically shift or pivot your approach in another direction that is now a better fit for the upcoming business conditions.

Signals That Should Cause Recruiting To Pivot 

Of course, the need to pivot is a lot easier to see when you are alerted with some silent kind of signal. In recruiting, those signals usually come from changes in “the underlying assumptions” of the business and talent market. When any factor changes, in order to maximize efficiency and effectiveness, recruiting should shift its strategy, goals, and tools in a significantly different direction.

The first pivot signal should come internally from your own business’s plans. Recruiting must pivot in reaction to your own company’s projected slowing in business, headcount, and revenue growth. External data will also signal when it is time to pivot. For example, indications that your supply of talent will be increasing begin whenever the unemployment rate goes up significantly. Higher unemployment will lead to a change in the ratio of active to passive candidates, and in your company’s qualified applicant per opening ratio.

Other external signals that will alert you about an increase in talent availability include a higher volume of layoffs, a suddenly lower average turnover rate, and a low percent of salary increases for the average worker. Finally, the affordability of housing and mortgage interest rates will alert you to a decrease in most new hire’s willingness to relocate. Obviously, if you want to get a head start on all of these soon to be needed pivots, you must continually monitor these business and economic alert signals.

The Top 10 Recruiting Pivots You Should Be Planning For 

Currently, many dramatic changes are occurring in almost every business, economic, and talent category. It makes sense for smart recruiting leaders to build pivot capabilities into each major element of their long-term recruiting strategy. The 10 recruiting pivots that are most likely to have the highest ROI and business impacts in today’s current economy are listed below. With the most impactful pivots listed first.

  1. Prioritize your jobs to maximize business impacts and to minimize budget cuts. During traditional times most jobs are filled based on the date of their requisition. However, during exceptional times, the filling of jobs should instead be prioritized based on their likely business impacts. The highest impact jobs are revenue generation jobs. Recruiting should shift its focus towards hiring only those that perform at a measurably higher level in sales and revenue generation jobs. The next best way to demonstrate business impacts is by raising the bar across the board by universally demonstrating that TA is now hiring individuals that perform at least a 10% higher level than previous hires. Finally, work with the CFO’s office to quantify each of TA’s business impacts in dollars. Executives will better understand your contribution because your impacts are now easy to compare to those of other functions since they are all represented in dollars. Recruiting generally has the highest revenue and profit impacts of all HR functions. This “show them the money approach” can lead to recruiting being designated as “an essential function.” Recruiting leaders should also note what others have learned: you won’t be able to maximize your business impacts until you shift to 100% data-driven decision-making.
  2. TA must pivot towards becoming a data-driven function. Every major business function outside of HR has long ago shifted to a data-driven decision model. However, if recruiters are going to work remotely, every aspect of recruiting must be digitized. And once that transition is completed, the widespread availability of data will likely force a pivot away from intuition and toward 100% data-driven decisions based on metrics. No single recruiting metric will be more important than the quality of hire because it allows you to identify the hiring factors that most accurately predict new-hire performance. Using only those factors that predict will dramatically increase the business impacts of recruiting. This data-driven approach will also allow recruiting to increase its speed, globalization, efficiency, and to quickly identify traditional recruiting practices that are no longer effective. 
  3. A pivot towards proactive poaching. In a down economy, obviously, your company’s overall hiring volume will be reduced. However, the limited remaining openings should be sourced through employee referrals and direct poaching. Poaching has an especially high ROI today because there have been so many large-scale layoffs covering entire departments or facilities. As a result, a significant number of highly skilled and high-performing employees have been suddenly released. You should target those that weren’t released because of their lack of skills or performance. You should also proactively poach the remaining most desirable employees at these firms. Because the large-scale cost-cutting, and layoffs probably have made their current firm a much less attractive place to work.
  4. A pivot towards internal movement. Talent acquisition, historically, means acquiring talent externally. However, with limited company growth prospects, most executives will see more value in retaining the proven top talent that they have already hired and trained. Since there will likely be many changes in business priorities, executives expect their top talent to move or redeploy rapidly into those higher business priority areas where they can have a higher impact. This requires recruiting to pivot into an area known as intraplacement. The remaining recruiters help identify and rapidly (and more accurately) move your employees to business units where they can be the most productive. This added support for internal movement is necessary because traditional internal transfer and promotion programs have proven to be largely ineffective.
  5. A pivot towards hiring those with remote work capabilities. The success of the recent “forced to work at home experiment” means a great deal of your company’s work will likely be made permanently remote. To maximize the effectiveness of this remote workforce, recruiting will need to begin hiring individuals that have the capabilities of working remotely. Like at Google, recruiting will have to learn to also hire those that can innovate remotely. Recruiting will need to help business unit executives to hire managers with the skills to direct a productive and innovative 100% remote global team. And, for those “come to work jobs,” it’s important to realize that getting candidates to relocate will now be much more difficult. Most candidates have dramatically reduced savings and will be less willing to sell their current house because of their lower home value. In addition, continuing immigration changes make bringing international workers to the US problematic. 
  6. A pivot towards a fluid workforce. Executives will soon realize that they have spent millions over the last year on acquiring a great deal of talent, and now had to jettison through layoffs and furloughs. Once they think about it, they will want to avoid the tremendous expense and pain involved in “binging and purging” their workforce. So, they will expect recruiting to come up with a plan to make their workforce more fluid or flexible. As part of that plan, they will still expect the capability of rapidly adding talent into suddenly high priority areas. However, they have a newly added expectation, which is the capability of rapidly lowering labor costs and labor skills in areas that suddenly have a low ROI. That fluidity can best be achieved by increasing the percentage of the workforce that are hired on a contingent, contract, or gig basis. Contractors can be hired for a limited-term, saving labor costs, and being quickly released with few legal issues. As a result, expect no more than 60% of your labor will be the traditional long-term employee. The recruiting function which has traditionally put low or no priority on contingent hiring will have to pivot to develop the capability of hiring a large number of high-quality contingent workers.
  7. A pivot toward future skills. In this high VUCA environment we are operating in, we will need to ensure that everyone we hire measurably demonstrates what I call “future skills.” Future skills will soon become essential in every professional job. In the soft skills area, we will need employees that are adaptive, agile, team players, and rapid learners. Other needed soft future skills will include the capability of working remotely, a global mindset, being comfortable with risk-taking, being able to work within a globally diverse team, and individuals that are focused on the future. In the technical area, we will need skilled people in all areas of technology but especially robotics, machine learning, data security, and quantum computing. Incidentally, this future focus on the need for a dramatically different workforce will also cause recruiting leaders to begin to reemphasize strategic workforce planning and predictive recruiting metrics.
  8. Employer branding must pivot toward avoiding negatives. Over the last few years, hiring has been highly competitive. Most firms have consciously built up what I call their positive external employer brand image. Now that the unemployment rate has skyrocketed, many prospects will apply for your jobs even when they know few positive things about your employer brand. Many will be deterred if they read that it appears that your organization has been ambivalent towards employee safety during the COVID-19 pandemic or harsh to your employees during your recent layoffs and furloughs. It makes sense to proactively neutralize or respond to all the negative things about your firm that can be found on the Internet or social media. 
  9. A shift in emphasis away from time to fill. During recent extremely low unemployment, I have been the most visible global advocate for reducing time to fill. In a highly competitive talent marketplace, you won’t land many “in demand” candidates because they will be gone by the time your firm makes a slow hiring decision. With some economists predicting the 20% unemployment rate by June, the need for rapid hiring decisions may already be diminished. You should still focus on hiring those that will turn out to be top performers. However, with so many of these individuals unemployed due to layoffs, the need for speed and exceptional selling capabilities both become less important. You should note that the staffing levels of the hiring manager’s team dramatically reduced that even a single unnecessarily long position vacancy will have an even larger negative impact on the productivity of an already overworked team.
  10. As applications skyrocket, shift to faster and more accurate candidate screening. With unemployment rates increasing by a multiple of four, your volume of applications will go up dramatically. Unfortunately, at the same time, you will receive a lot of junk applications. With recruiter workloads already strained, you will need technology help in order to rapidly identify quality candidates among your sea of questionable resumes. Fortunately, even top candidates may be desperate, with no extra effort required, your offer acceptance rates will increase dramatically.

Some Additional Pivots That Recruiting Leaders Should Consider

  • A pivot away from emphasizing the candidate experience. You always want to be reasonable to applicants because they may be customers. As the availability of talent increases dramatically, the power shifts away from the applicant and back to the company. Since candidates have few choices, you will get less positive ROI from each percent of improvement in your candidate experience. 
  • Recruiter cost-cutting inevitably leads to technology replacements. There will be a dramatic reduction in the number of employees working in talent acquisition at many firms. With long-term hiring freezes, smart recruiting leaders will have a great deal of time to look more closely at technology replacements for staff. Even though many have already taken baby steps, many key recruiting jobs in candidate communications, sourcing, and candidate assessment will be replaced with chatbots and improved recruiting software. This means that many recruiters working in those areas will be permanently replaced. The need for dramatic cost-cutting in recruiting will also force many of our leaders to consider completely outsourcing the recruiting function. Leaders can prevent being forced into an RPO by demonstrating how in-house recruiting can attract and hire better performing candidates (quality of hire).
  • Shift to a more cynical view of vendor reliability. With the tremendous downturn in recruiting volume, you can plan on many underfunded small TA vendors going under. So, it makes sense to periodically assess the stability of each of your vendors. And, double-check that you will maintain complete access to your own talent acquisition data, should one of your vendors go under.

Final Thoughts

If you were an overly rigid tree, in the storm, you would likely break under the wind. The same is also true of recruiting functions because they are frequently extremely fixed in their ways. In my experience, I have found few that have formally included the necessary capabilities for shifting direction and pivoting as the economy sours. If you forecast that this VUCA environment and turmoil will continue for years, it’s time to ensure that at least your new recruiting initiatives each contain a 180° pivot capability.

Author’s Note: If this article stimulated your thinking and provided you with actionable tips, please take a moment to follow and/or connect with Dr. Sullivan on LinkedIn and subscribe to his weekly article on Aggressive Recruiting.

Image from Pixabay.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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