It seems that everywhere you look, there’s talk of economic headwinds on the horizon. The ‘R’ word – recession – is tossed about more frequently every day. And it’s certainly possible that we’re seeing a slowdown. Apart from a brief hiccup directly attributable to the onset of the pandemic, we’ve not experienced a true recession for many years. In fact, quite the reverse. The economy has been overheated, and we’ve felt the effects with increased competition for talent in short supply.
If there is truly a slowing of the economy, it may seem that the prudent thing to do is to put a freeze on hiring. To turn off the taps of your talent pipeline. There certainly are many companies doing just that. Companies are cancelling vacancies, rescinding offers, and laying employees off. The tech startup sector has been particularly hard-hit, registering nine times the number of layoffs in Q2 than in Q1 of this year.
In actual fact, though, that could be the riskiest thing for a company’s talent strategy.
Here are three reasons why now isn’t the time to freeze your hiring pipeline.
Reason 1: Maintaining Momentum is More Efficient
A frozen pipeline has to thaw out before it starts to flow again. It takes energy to build and maintain a talent pipeline, and to keep the top candidates moving towards their first day with your business. Putting a freeze on your hiring pipeline stalls the momentum you’ve built. You’ll lose candidates, and you’ll lose the efficiencies and some of the structures that your team has developed through the fast-paced hiring of recent years.
If you must slow things down, do so. Like a runner slowing to a walk, it’s healthier for a business to keep moving than to stop altogether. You’ll keep your team active, their skills sharp, and your candidates engaged. When the economy – and the market for talent – heats up once again, as it will, the companies who maintain their momentum will be the ones leading the pack.
Reason 2: Hiring Freezes Send the Wrong Message
Top-level candidates in your pipeline want to join companies that are healthy, stable and secure. Companies that are growing; ones that have a bright future. Putting a freeze on hiring sends the opposite message. It risks creating the concern in candidates’ minds that the company isn’t on solid footing.
Even if you must slow the pace a bit, show your candidates that they have a bright future with your organisation by keeping the process moving. It would be naive to ignore the economic and business realities, so be open with them about the company’s concerns, and the steps it’s taking to protect its long-term interests. Be proactively transparent with candidates about any changes in the hiring process – the timeline, or the steps ahead. You can do all this while still projecting the cautious optimism for the future that a prospective employee wants to see.
Reason 3: Hiring Companies Have a Competitive Advantage
The current reality is that many companies have, in fact, put a freeze on hiring. There are more candidates on the market, and fewer vacancies for them, than even six months ago. This is creating changes in the market for talent that are in stark contrast to the overheated competition we’ve seen in recent years.
What does this mean for you? It means that if you continue hiring, you’re on a more competitive footing than before. Your top candidates aren’t looking at as many other opportunities; they’re not considering as many competing offers. Now is the time to double down, investing in your relationships with those candidates and keeping the hiring process moving.
But wait, there’s one more…
The three reasons above are why it’s beneficial for your company to keep your talent pipeline moving. There’s another reason that’s important for all companies – yours, and the others in your sector as well.
Recessions can be self-fulfilling prophecies. When the future is looking less rosy than we’d like, many companies respond by putting growth plans on hold. They stop investing, and they stop hiring. And that lack of investment can in itself create a recession, or worsen it. To soften the blow, we need as much cautiously optimistic investment as we can get.
The Big Thaw
When there are dark clouds brewing on the economic horizon, freezing your hiring pipeline can seem like a reasonable and prudent thing to do. In fact, it can cause more harm than good to your long-term talent strategy. Don’t freeze up. Now’s the time to take your talent off the ice.