Firms weakened in recession

Firms risk a decline in efficiency and a weakened competitive position if they fail to change their approach to recruitment in a recession, warns a new report from Jobpartners and analysts IDC. The most commonly held belief is that in a recession the labour market swells and finding suitable people to fill vacancies is easier. But the report shows that this is wrong and there are two main reasons highlighted.

The larger pool of skilled workers leads to an increase in the number of people applying for jobs that are advertised. Companies are often poorly equipped to handle the increased number of applicants, making it harder to find the best person for a job and increasing the risk of another company hiring them first.

As market confidence decreases so does the willingness of employees to change jobs. As a result, more and more skilled people will chose to stay where they are rather than risk taking a step into the unknown.

With many firms now relying on skilled people for their success, even in a recession, attracting, developing and retaining qualified staff is vital to business performance. Failure to hire someone who is not right for the job results in higher training costs. It also takes longer for them to become fully productive. Many leave before they have reached their potential, because employees are only fully productive after a period of company culture orientation, training and development. All this has a direct impact on the bottom line profitability of an organisation.

Once the downturn is over, organisations need to be ready to compete and grow, according to the report. However, most donít keep records of good candidates who contact them and still rely on labour intensive paper based recruitment methods. As a result they often struggle to find skilled people once market confidence returns. A firmís image may even be damaged because of the poor way they have handled people whoíve contacted them in the past, making it even harder to attract the right candidates.

Commenting on the report, Patrice Barbedette, Jobpartners CEO said: ìWith the threat of recession firms should be assessing their recruitment practices. There are systems available that manage the recruitment process efficiently and leave the HR department free to answer strategic questions. Systems that help firms attract, develop and retain the best employees are not just nice to have but they are vital to the success of companies in boom and recession.î

Mike Friend, the analyst at IDC responsible for the report comments: ìIn todayís competitive business world hiring and keeping the best people is vital to business success. Firms may talk about the importance of people, recruitment and HR being strategic but in practice too few are willing to implement changes that embody this commitment. Companies urgently need to bring order to the increasing chaos in todayís hiring process to stay ahead during an economic downturn.î

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