Human Resources IQ Miniseries: The Upside of a Downturn: How Smart "Investors" Find Bargains During a Business Slowdown
Part 2 of 3
View Part 1: The Engagement Cycle
Poor Hiring is Like Poor Investing
Economic slowdown means top talent, usually rare and expensive, is briefly abundant and more affordable. Typical hiring techniques, however, won’t attract these talented individuals for the simple reason that they, as individuals, have become more risk-averse, and those who are employed are less likely to switch employers.
A slowdown exaggerates fears of scarcity: scarce money, scarce security and scarce jobs. Typically, hiring managers and executives hunker in the bunker, cautiously cutting budgets and limiting new initiatives. Corporate leadership that chased valuable talent with increasing salaries just a few quarters prior to the slowdown turns 180 degrees and treats talent as an asset to be stretched. Hiring budgets decline and employer branding efforts stall until corporate profits return to robust health.
This corporate behavior is reminiscent of the amateur investor who sells his stock holdings into a bear market, then tries desperately to catch up when the market turns north. Successful investors, on the other hand, view market corrections as opportunities to acquire high-quality stock at a bargain price.
Similarly, a "bear market" in talent (e.g. higher unemployment) is an opportunity for managers and investors to gain the attention of top talent. Even when employers can’t load up their workforce during a slowdown, they can build up their portfolio of relationships with the best potential employees by reaching out to the best.