How HR Can Help Companies Navigate the Economic Downturn
With each inflation report bringing fresh news of soaring prices, consumer sentiment plunging, and constant interest rate increases coming from the Federal Reserve, job candidates are facing extreme economic volatility. Meanwhile, their expectations have shifted dramatically over the past two and a half years – they now place a premium on flexibility, large numbers of employees are quitting their jobs, and in many cases, they’re demanding higher salaries.
All these factors have coalesced to create an immensely difficult situation for HR teams. They don’t just have to worry about turnover and shrinking budgets – they also have to navigate one of the most competitive labor markets we’ve seen in many years. For these reasons, HR professionals have to rethink many of their standing assumptions about how to hire and retain talent. Companies need streamlined, fair, and transparent hiring processes which will inspire confidence among candidates and accurately predict future job performance.
Candidates are well aware that they face a difficult economic environment, but one of the themes from our recent survey of just under 2,000 job candidates is the high level of confidence among today’s job-seekers. They know companies are struggling to recruit and retain employees, they believe they’re capable of showcasing their qualifications, and they expect a greater commitment to their well-being and professional development than ever before.
Earn Candidates’ Trust With Transparency
The quickest way to alienate job seekers is to make them feel like their time isn’t being respected.
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Our recent survey found that nearly one-third of respondents will abandon the hiring process if they believe it’s taking too long. To avoid leaving candidates with this impression, HR teams have to be upfront about how the process will unfold and what’s expected of them. They should also provide all relevant information about the responsibilities and requirements of the job, compensation and benefits, and so on.
The number one reason candidates drop out of the recruitment process is “salary didn’t meet expectations,” while the second-most-cited reason is “poor communication from the employer / recruiter.” These issues are often connected, as many companies fail to disclose salary information early in the hiring process – despite the fact that 82 percent of candidates say they prefer it when job descriptions provide this information. Even if you don’t list salary information in your descriptions, you should have open discussions with candidates about compensation as early as possible. This will avoid wasting their time – as well as yours.
There are many other issues HR teams should have candid discussions with candidates about, from benefits such as PTO to the workplace culture. When hiring managers provide this information early in the process, it will open avenues for dialogue and ensure that companies and employees are learning what they need to know about one another.
How to Fully Leverage Candidate Confidence
Although economies around the world are facing the possibility of imminent recession, our research finds that candidates remain confident in their ability to command pay. Seventy-nine percent of respondents to our survey agree with the statement “I am confident I will be paid enough in my new role,” while almost half strongly agree. Candidates don’t think they’ll have to compromise their personal and professional ambitions, either – 87 percent of job seekers are confident they’ll find a satisfying new job, while over two-thirds are very confident.
Candidate confidence is a contributor to inflation – when companies have to pay workers more, they charge higher prices, which leads to demands for even greater pay, and so on. However, confidence also has positive implications for candidates’ perceptions of the hiring process. Our report found that 71 percent of candidates feel the hiring process is fair, while 84 percent believe they’re capable of demonstrating their full potential to employers. Over half of candidates even believe AI-based hiring can represent them accurately.
Candidates aren’t intimidated by objective hiring methods such as pre-employment assessments – 94 percent say assessment scores show employers their potential to succeed. This means HR teams can use efficient and predictive hiring tools like assessments to choose the best people for the job while simultaneously increasing trust in their hiring process.
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Flexibility Is Vital for Recruitment and Retention
Human capital is one of a company’s most significant expenditures, and at a time when employees are demanding higher pay, budgets are tightening, and competition for talent is fierce, HR teams have to develop ways to recruit and retain talent as cost-effectively as possible. We’ve discussed two of the ways companies can accomplish this goal: with transparent hiring processes and the deployment of objective, fair, and predictive pre-employment assessments. But HR teams have to focus on building workplaces around one of the most rapidly emerging employee priorities: flexibility.
Candidates’ expectations about how and where they work have changed permanently over the past two years. Our survey found that flexibility is the number one priority for candidates, ranking even higher than compensation, work culture, and benefits. Meanwhile, one-third of candidates say they’ve given up on a recruiting process because a company didn’t offer remote or flexible work options. After the surprisingly effective transition to remote work during the COVID-19 pandemic, most employers now acknowledge that they will need to offer some form of remote work indefinitely while employees expect much more control over their schedules and the ways they work.
It has never been more important for HR teams to find qualified candidates, hire and onboard them quickly, and minimize turnover. In a period of economic turmoil, an effective hiring and retention strategy will make companies far more attractive to job seekers than their competitors and ensure that they have the human capital necessary to maintain high levels of performance through future shocks and downturns.
If HR teams focus on transparency, efficiency, fairness, and flexibility, they’ll put companies in a strong position to navigate the economic turbulence that shows no sign of stabilizing anytime soon.