We can’t predict how markets and the economy will change in the future. But, we do know that downturns are ALWAYS followed by expansion and growth. 2021 was an extreme example of how quickly things can change. It’s important to remember that many of the world’s most successful companies were born during or just prior to significant economic downturns — Slack (2009), Uber (2009), Square (2009), Airbnb (2008), Salesforce (1999), Google (1998), and the list goes on.
Here are five things to prioritize during a market downturn:
1. Stay informed about the macro environment that your company is navigating. These insights will help you frame decisions that are being made with your team, and to help you show up to hiring prioritization conversations with context. Many of your founders are getting guidance from their investors, and it’s important to understand some of the headlines that they’re hearing. Here are a couple:
Craft Ventures: Operating during a downturn - focus is on SaaS businesses
All-In Summit: Bill Gurley & Brad Gerstner on markets, downturns & investment cycles (Context on inflation 5:00-10:45)
2. Put hiring plan prioritization in context. Even if your company is choosing to pause on growth, there are backfills and pipelines to be built. Understand the skills and the roles that would kill the business and build a strategy around sourcing and candidate activation. Talented candidates are always in demand and now there may be more hesitation than ever to make a move, especially to earlier stage companies. Candidates are also taking more time between accepting and starting new roles, so it’s important to plan for extended start dates of a month or more vs the typical two weeks. The summer months will likely further impact this.
3. Nail your company pitch. Candidates are asking more questions relating to the health of the business earlier in the process. It’s important to be able to frame the future opportunity, but also the financial momentum and runway if there’s an extended recession. Now is a great time to align everyone at your company around your employer brand pitch and to amplify it. Beamery published a Definitive Guide to Recruitment Marketing that is helpful for those of you that are early in your talent brand journey, and SignalFire created a guide on How to Make a Startup Careers Page that really resonates with us and provides a useful framework with examples.
Say:Do Ratio. Candidates are paying close attention to how companies navigate and treat employees during these times. We think of this as the Say:Do Ratio. Is what is being said about your company culture and values showing up in how the company makes tough decisions during these times? Airbnb had to let go of 25% of its workforce in 2020 and we’ve heard of countless stories of people that happily boomeranged when hiring spun back up. Unfortunately, there are also stories of companies whose Say:Do Ratio hasn’t stayed aligned, and those actions will have compounding effects when markets inevitably recover.
4. Efficiency never goes out of style. Inbound interest will likely pick up over the coming months for companies that are still hiring with a compelling pitch, so both volume and quality within those applications are likely to increase. Now is a great time to build capabilities and processes for qualifying and building great relationships with candidates even if you don’t have roles open now that are a fit. In our April newsletter, we shared tips for improving your interviewing process to drive efficiency as well.
5. Invest in career development. It’s often difficult to see the opportunities through the fog of all the uncertainty, but market downturns tend to be the best time for career development for you and your team. For most companies, the number one reason people leave is because of the lack of career development and a view that they can grow their career at the company. Employee experience and L&D initiatives can help improve retention and get the most out of the existing team. Even if there isn’t a company-wide initiative in place to address this, you can proactively explore solutions for your recruiting team or the broader people team. For example, what would a people team or a recruiting MBA look like with rotations across functional areas? Where do career ambitions align to needs of the business for technical or creative program managers or customer success roles?
Employee experience - it’s a great time to be looking inward and investing time towards internal mobility and rotational programs. Recruiters tend to be in a great position to be able to lead these initiatives.
L&D - build manager capabilities or coaching circles, share new skills development opportunities through structured courses, mentoring, or informal workshops. One very tangible learning opportunity that we think recruiting leaders at all levels could benefit from is Storytelling with Data. Lots of great resources to dig into and apply to your work.