By Peter Weddle, CEO TAtech
All those highly paid company execs out there – whether they’re running a mega corporation or an SMB – are making a huge mistake laying off recruiters right now. Worse, they should know better. This ain’t their first rodeo. They’ve been through economic tough patches before, and they’ve seen what happens when they put short-term financial considerations ahead of long- and even mid-term business strategy. The outcome wasn’t pretty back then, and it’s likely to be even worse this time around.
The primary culprits in today’s mismanagement of corporate recruiting teams are The Wall Street Journal and CNBC. They’ve messed with the minds of today’s business leaders. Those individuals may see themselves as clear-eyed titans of commerce, but in truth they are herd animals. They consume the pronouncements about “trends” published by those two business news outlets, and then shape their workforce management and talent acquisition strategies accordingly. There’s only one problem. All too often, the conventional wisdom the outlets report isn’t all that wise.
Let’s take layoffs, for example. If you read and/or listen to the news accounts, you’d think layoffs were rampant. According to the reporting, workers are being shown the door all over the place – just like they are in their lead stories about the tech sector. That’s the logical fallacy known as the Extrapolation Error. Executives reach a conclusion about an unknown – how hard it will be to acquire new talent – by inferring from something that is known – the layoffs that are breathlessly reported by the Journal and CNBC. They assume, as a result, that bringing on new employees should be as easy as shooting fish in a barrel.
Unfortunately, however, it’s not. Why? Because drawing a line from what the business media reports to the reality recruiters face on the ground is just plain wrong. According to last week’s JOLTS report from DOL, layoffs in the U.S. are actually running 500,000 FEWER per month than they were prior to the pandemic. The unemployment rate is still just 3.6%, 1.6% BELOW the 5.2% level the Federal Reserve defines as full employment. In point of fact, recruiting has gotten harder not easier, which is why those company execs should be holding onto recruiters, not laying them off.
But, what about if an employer is laying off workers or at least isn’t hiring any. Should it still keep its recruiting team intact? This lull in the frenetic pace of filling vacancies provides the perfect opportunity to audit the team’s policies, practices and technology to determine if they are optimized for acquiring top talent. Laying off recruiters is basically fighting the last war for talent; applying their experiences and insights to improve the recruiting team’s capacity for excellence is preparing for the next war. And, as every company exec should know, every downturn in the economy is followed by an upturn, and when that happens, the ability to hire mission critical talent is the pacing factor in corporate recovery.
The facts! In a talent market that is more competitive and less understood than at any other time in history, it’s the facts that matter most. And TAtech’s biweekly Start Smart podcast focuses on the facts. Join me, my cohost, Shelia Gray, VP of Global Talent Acquisition at Quadient, and our guest Stephen O’Donnell, TAtech Chief Growth Officer, as we examine the findings from the latest talent acquisition research and explore their implications for recruiters and job seekers. This week, we discuss a recent report by Sapient Insights entitled “The 25th Annual HR Systems Survey.” While the report covers all of HR technology, we address its findings and conclusions related to talent technology and their implications for recruiters.
Let’s take the corporate acquisition of talent technology. According to a recent report by Sapient Insights Group, that will be the #1 area of investment among companies of all sizes over the next year. In fact, companies with 500 or fewer employees reported that they would continue to spend as they had before the economic clouds gathered, while more than half of the companies with 500 or more employees were actually going to increase their pace of talent technology acquisition. And, not by a little. The average increase among the respondents was a whopping 21 percent.
A smart employer will use the slower pace of recruiting to ensure that the right products are acquired and effectively implemented. Recruiters won’t have to juggle a dozen or more open reqs while trying to contribute to such efforts, but instead, can devote their time and expertise to make a difference. In addition, recruiters’ participation in these projects often transforms them into internal champions for the new tools, which in turn helps to overcome any concerns recruiters might have about the impact they could have on their day-to-day work. So, despite company execs’ misgivings, there’s plenty of critically important work for recruiters to do, even when they aren’t actually recruiting, and that work can set them up to be even more productive once they are recruiting again.
The challenge in both of these cases – when company execs misjudge the talent market and when recruiters aren’t actively recruiting – is to avoid a passive response in the face of prospective or ongoing recruiter layoffs. Recruiting teams should proactively educate the chain of command on why that’s a bad business strategy and on an alternative approach – whether that’s holding recruiting budgets and headcount steady or avoiding recruiter layoffs – that will serve the organization better, in the near term and when the economy is at full speed again.
Food for Thought,
Peter Weddle is the author or editor of over two dozen books and a former columnist for The Wall Street Journal. He is also the founder and CEO of TAtech: The Association for Talent Acquisition Solutions. You can download his latest book – The Neonaissance – FOR FREE at OneStoryforAll.com. And, if you don’t have time to read the entire book, just download a short excerpt of his inspirational message.