Have you ever heard that there is always an opportunity present in the midst of crisis, It is true that at the heart of each crisis lies a tremendous opportunity and that’s exactly what an economic slowdown does. An economic slowdown can be for many reasons. We have sailed through this in the form of dot.com bubble, Y2K scare, 9/11 attack, Lehman Brothers collapse and so on. They all have caused severe economic contraction.
We have seen economic fluctuations but it has been quite some time that we experienced a deeper one which created a severe impact. So what is it now and why are the talks getting deeper and deeper! Is it coronavirus? The numbers tell a story, a micro view shows that travel has gone down, events are cancelled, profits are hurt, and revenues are down with stock market dipping. Regardless of the shape and size, they come in, the disaster that the crash can bring can take years for us to return to a growth phase again.
It’s a well-known fact that the recession caused by economic slowdown can be catastrophic to an organization, it can be a salary cut down, promotion hold, hiring freeze, cancelling of events like celebrations, per-diem cuts, low morale, and travel freeze and many more. It is always a combination of both hard and soft factors. Hard is the cash flow of the company and soft is morale. These are decisions that business often has to make during these times and, without which, the employment brand can come crashing down. Clawing back to its glory will be even more difficult or merely impossible. This is a time where HR needs to think innovatively.
Let’s do a quick flashback; while this slow-down is not new, we need to learn on how some organizations survived this. What worked for them and what can we learn from it? Let’s look at these examples below:
Netflix, the streaming powerhouse of the world and probably the biggest case study in many forms. In 2008, when the economic slowdown hit, many companies in the entertainment industry struggled to thrive, however, Netflix interestingly managed to attract more subscribers, ended at a better stock price. Netflix proved to be a disruptor during a slowdown by changing its core strategy, it focused more on attracting new customers by providing services at a lower price at a different platform unlike the satellite services which were far more expensive. Netflix was reading and learning from its consumer behavior and constantly adding value and personalizing user experiences, which clearly did the trick for a giant to be now.
Amazon, again a big giant in retail space. Amazon also grew at the same pace while everyone else was hit by the recession. Both the sales stock price and customers grew! Amazon worked on the philosophy of having customer service as a priority and to become a market leader. Profitability came next. It heard the voice of customers who were constantly looking at affordability, discounted prices and a variety of offerings. Amazon launched several new products at lower prices, which changed the game for them and made them a top choice for consumers.
Domino’s pizza became a pizza of choice only when the recession hit, it reinvented itself and announced that it was changing its signature pizza. They spent a considerable amount on research, marketing and communication. The new pizza was a huge success.
So a key takeaway HERE is that the temptation for any company in the event of an economic crash is always to go into a survival mode but in order to truly survive they must focus on the long term. Here the companies invested in the future and tried making the experience personal not just to their customers but also to their end customers. While it’s true that any business has the potential to survive a recession, some may have better potential than others and companies that master the balance between survival and long term investment certainly do well and obviously none of this is possible without having the right TALENT!
There are many success stories, but just by looking at these 3, recruiters have a head start to start thinking about how to deal with this and deliver to predictable business value.
- While organizations are thinking through the holes and thinking ahead of the bend, the other side of the world has a talent which is a clear driving force and this force is focusing on job security and career growth. The recruiter needs to bring alignment on both aspects to play a big part. Recruiters should have a greater responsibility in dealing with numbers, lowering costs to attract talent, building relationships and talent pipeline to exactly match with the transition that the organization is going through plus make a viable career for the prospect. This is building a personal experience for both the company and the candidate which will last long term, very similar to what Netflix did.
- Recruiters should focus on improving their processes and programs like mobility, onboarding, new hire experience, candidate experience, candidate communication, referral program and of course their own productivity. Focus on pay for performance model that will allow for recruiters to think out of the box and get more out of the team. This will enable them to prioritize their serviceability to both internal and external customers like Amazon.
- Recruiters should look at hiring top talent as the market is low with low hiring activity anyway, this would allow them to hire top talent with less competition and who knows this may come cheaper than hiring during a rigorous talent war. This is a typical buy to build strategy. Instead of buying talent during high demand, you build talent for the long term from the external market and internal which becomes more strategic in nature. Like dominos re-strategize their game, this will allow recruiters to rethink their hiring strategy altogether allowing them to balance both near term and long term.
I personally like this quote: “Some believe that the recession is bad, but it’s actually like a healthy economic cycle.” When we experience pain somewhere, it is a sign of something not right thus needing a quick remedy to solve the problem. The same applies to us, we have to take benefit of the downturn and power-tune ourselves to a better tomorrow!
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