Being strategic always requires some degree of unconventional thinking. If you are a corporate recruiting manager and you are looking for an opportunity to have a strategic impact, you need to understand why today is literally the best time to be actively recruiting in at least the last 25 years.
I’ll demonstrate why there is a confluence of factors that make this a “perfect storm” of opportunity if you implement a countercyclical hiring strategy.
I’ll start out with three analogies that show how this current economic lull is an outstanding opportunity to fill your forecasted senior management vacancies that will result from baby boom retirements.
Analogy #1 — Understanding the Perfect Time to Buy
Any manager who has participated in a significant volume of corporate purchasing negotiations realizes that there are economic and competitive factors that make a particular period the “perfect time” to get the best deal. The “best deal” means a procurement opportunity where, with little effort, you are likely to get the best quality, the broadest selection, and at the lowest price.
The five factors that provide a “perfect deal” opportunity include:
- No competition — when your competitors aren’t buying.
- High availability — when the available quantity or volume of the product is high so that sellers have a surplus.
- High-quality — when the quality of the product is high.
- Low cost — when the cost is low (because of the high supply and the low demand).
- Low supplier power — when the weakened bargaining power of the seller has made them more open to concession in terms.
For many markets, it’s a “once in a generation” perfect-storm opportunity when these five factors occur simultaneously. While many nations do not have a labor shortage, many including the United States do have a talent shortage.
If your organization has struggled in the past two decades to find top talent to fuel growth initiatives, this temporary respite in competition for labor should be leveraged to the hilt.
Procuring high-quality talent at low cost and with minimal effort would certainly make you a hero among senior managers with mounting volume of work to be completed.
Analogy #2 — Understanding the Perfect Time to Acquire Exceptional Sports Players
Let’s assume for a few minutes that you run a professional sports team. You would quickly realize that the best time to build a sports franchise by recruiting enough star players to give you the capability of winning the championship would be when most of the following “five factors” are present:
- No competition — the other top teams aren’t recruiting, so no one else even bids on top talent.
- Talent costs were low — because no one is actively bidding, the costs of acquiring any available talent would be low.
- High-quality talent available — an opportune time to recruit would be when there were a number of genuine superstars available and in addition, there was also a large volume of high-quality talent available across all of your key positions.
- The players lack power — whenever there is a lack of competition and few open positions, even exceptional players become amenable to considering and accepting job offers that they would not have previously been considered.
- Everyone is recruitable — and most important, all in the case where all no trade clauses have been made null and void, you could literally “take” any player from any team without any remuneration or legal restrictions.
Actions that you would take when most or all of these factors occurred would include:
- You would over-hire players — should this “perfect storm” confluence occur, the opportunity would undoubtedly excite both you and your managers. It would probably also cause you to expand your recruiting, so that you would “load up” with talent, even in positions where you were already satisfied with the talent you currently had.
- You would designate “evergreen jobs” to ensure you never have a shortage of great players. For these few roles, you would continually recruit and hire exceptional talent whenever it was available at a reasonable price. The logic would be simple. In the sport of baseball, you could never have “enough” pitchers with an ERA of under 3.0. If you “own” all the talent, your competitors can’t. If you had “surplus talent” in key positions, you could just adopt new approaches to take advantage of the available talent.
- You would make immediate “opportunity hires” — if the team that you managed was a professional golf team, you would have previously assessed all of the top talent in your league. As a result, you would not need a lot of time to decide who you wanted to hire and who you didn’t.
- You would directly “raid” other firms when they are weak — unlike in professional sports, there are no restrictions on recruiting away top talent from competitors, so you would develop an active poaching process to take their best players when their team was at its weakest.
Analogy #3 — The “illogical” current corporate recruiting strategy
In 99.9% of all corporations, if Tiger Woods (or his equivalent in business talent) walked into your recruiting office and you did not have an open requisition for his specific position, you would literally send him away. Because the economy is down, corporate recruiting is stuck in cost-cutting mode. It isn’t doing any significant sourcing or hiring and the CFO may in fact have already decimated the recruiting team.
Most would classify this current time period as “bad times” when you lay low to avoid getting the recruiting budget cut even further. You certainly wouldn’t view this as the best time for recruiting in a generation.
All the Factors Point to a Great Time to Recruit
The purpose of these three related analogies is to demonstrate the identifiable factors that make it a perfect time to buy. You might be surprised to learn that whether you’re buying products or sports stars, the factors that make it “an ideal time to buy” are strikingly similar.
Currently, top talent is abundantly available; at no other time in recent economic history has the pendulum swung so far toward the advantage of the employer.
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Guide: Practical Tips for Remote Hiring
Unfortunately, most corporate recruiting leaders haven’t taken advantage of this opportunity. Perhaps the leaders in corporate recruiting are too close to the situation to actually see the tremendous opportunity that is facing us today.
Because revenues are down, today isn’t the perfect time to do large-scale hiring, so implement select “surgical hiring” where you selectively build your organization by hiring a relatively small number of exceptionally talented individuals for your key positions.
In the following section I’ve provided the most important factors that should cause you to begin countercyclical hiring.
The Perfect Time for Recruiting
- Competitors are out of the market — almost no one is in the talent market right now. Most firms have instituted a hiring and/or a budget freeze, which means the competition for talent is ridiculously low. They won’t need to enter into a single bidding war for top candidates when the talent competition is out of the marketplace. In addition, you might feel relatively alone among corporate recruiters, if you choose to visit college career centers.
- High-quality talent is available — in some downturns, only low-quality talent is laid off by corporations. However, during the current downturn, because of a large number of recent mergers, facility closings, and the complete elimination of some major firms, the amount of extremely high-quality unemployed or underemployed talent available around the world is at an all-time high. Even currently employed top talent who have jobs haven’t been treated very well during the downturn, and a record number of over 60% of these fully employed individuals are open to new opportunities.
- Costs are low — the lack of competition and the down economy have forced the price of available talent in almost all positions back down to reasonable levels. New referral approaches and Internet and social networking recruiting tools have also reduced the cost of recruiting talent. Taken together they have dramatically decreased the cost of adding talent.
- Talent is amenable — the lack of available job opportunities has “shifted the power” away from talent and toward corporations to the point where top talent will consider job opportunities and options today that they would have rejected as little as two years ago.
- The coming retirement wave — the dramatic reduction in stock prices and 401(k) values has temporarily postponed the upcoming wave of retirements. Despite this delay, these retirements will come eventually and if the economy turns around suddenly, firms may very soon be faced with a tidal wave of retirements. Because large-scale retirements may begin in as little as a year or two, now’s the perfect time to “stockpile” and develop possible replacements for your most experienced managers and technical talent.
- The coming retention problem — if your organization is among the many that have undergone layoffs, frozen hiring, reduced budgets, and maybe even cut salaries through the use of furloughs, the odds are that your current employees are overworked and stressed. This less-than-perfect treatment coupled with the fact that many of the “new generation” of employees have little to no loyalty to a single firm will result in a dramatic increase in turnover as soon as more external opportunities begin appearing. Obviously, you should begin retention efforts immediately but it may not be possible to remove the “bad taste” that your current employees experienced. Expand your recruiting efforts to find replacements and realize that new hires are likely to be more loyal than most employees because they are now seeking security and they would certainly remember the fact that you “saved them” during a period when no one else would even look at their resume.
- Remote work is more feasible — the unwillingness of some talent to relocate has limited a firm’s talent options, but the increase in knowledge work coupled with the currently available technology makes it possible to allow top recruits to work at home with no loss in productivity.
Other advantages to countercyclical recruiting include:
- There are benefits if you “begin looking early” — the competition in the market for products and services has not slowed down in the slightest. As a result, companies are now planning numerous new technologies and processes to increase their productivity. By hiring now you provide new hires with enough training and development time to be up-to-speed as these new technologies come online. Hiring individuals before you need them also gives them a chance to adjust to your corporate culture. Hiring a surplus of talent will provide you with an opportunity to “release” employees or new hires who can’t meet productivity goals. A final advantage of beginning your recruiting search early is that even if you merely stretch out the time period over which you are actively looking for talent, you automatically increase the odds that one or more top individuals will become available during the extended search time.
- So what if you hire too many? — can you imagine a sports team having too many stars of the caliber of Tiger Woods, Kobe Bryant, or A-Rod? With this exceptional talent, you could more easily beat your competitors. I once saw a general manager at Agilent Technologies respond with astonishment when an HR manager suggested that it would be a problem to have a “surplus” talent in our number-one, high-impact position. The GM responded without hesitation that “would be a nice problem to have.” If we had too much talent in that position, “we would just try new things because of our increased capability.” I hope that you can see that, yes, there would be some added costs in “over hiring” but the opportunities and benefits would far outweigh those costs.
Update Your Recruiting Strategy with These Seven Elements
Hopefully the analogies and the eight factors listed above have convinced you that now is the time to rethink your approach to recruiting.
If so, there are seven major elements related to countercyclical recruiting that you need to consider adding to your current recruiting strategy:
- “Pre-need hiring” — this approach is where you build relationships and hire talent before you actually need it in order to provide ample time to develop and acclimate to your culture .
- “Over hiring” — over hiring is where you purposely hire more talent than you immediately need in order to prepare for an “upturn” in demand. Alternatively, you can also use this as a stimulus to “swap” poor performing current employees with high-quality replacements.
- Build a talent pool — a “talent pool” is a group of highly desirable talent that you identify, assess, and build relationships with over time, so that when an opening occurs, most of your sourcing and initial assessment is already done.
- Opportunity hiring — this approach involves quickly “pull the trigger” and immediately hire superstars (that you have pre-identified and pre-assessed) immediately as they become available.
- Most wanted list — this element is a combination of talent pool and opportunity hiring. Under this process, at the beginning of the year you select the top 25 (up to 100) most desirable individuals in your industry. You essentially “prequalify” them and you then spend the rest of the year trying to recruit them. As soon as one becomes available, you make a hiring decision.
- Employer brand re-building — odds are that if your firm has undergone layoffs, furloughs, mergers, or bankruptcy that your external image as a “top place to work” has been severely damaged. Add to corporate actions the fact that numerous opportunities for employees (current and former) to share their perspective online have popped up in recent years and it becomes clear that nearly every organization needs an aggressive strategy to manage their brand perception online.
- Approaches for identifying when your competitors are recruiting – “countercyclical” recruiting is where you recruit talent during times when other firms are out of the talent market. If you are not sure who is recruiting actively, have an intern check your competitor’s websites to see which jobs they are recruiting in high volume.
A handful of firms (Google, Slide, Microsoft, Principal, and HP) have to be recognized because they understood both the need and the opportunity to continue hiring during this downturn, even though they too may have been cutting their workforce.
However, the majority of recruiting directors haven’t taken advantage of this once-in-a-lifetime recruiting opportunity. I can only identify two major reasons for their lack of action.
The first is that they have just failed to be strategic and instead had a misdirected focus on cutting recruiting costs, rather than the more impactful strategic focus of increasing corporate revenues.
The second more palatable reason is that they understood the opportunity but they just didn’t have the capability of building an effective “business case” with senior management. That latter reason in one I’ll tackle in a future article.