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Lucie Mitchell

Sift Media

Freelance journalist and former editor of HRZone

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The impact of the recession on recruitment


Whether levels have dropped or increased, recruitment processes have definitely changed since we entered into the recession. Lucie Mitchell examines exactly what impact the downturn has had on recruitment and retention in UK organisations.

The most obvious impact of the recession on organisations is that employers are recruiting less and making more redundancies. In fact, according to the latest CIPD/KPMG Labour Market Outlook survey published last month, the jobs market will carry on shrinking over the next quarter, as the number of employers planning to make redundancies will continue to exceed the number planning to hire. Plus, a third of organisations are still implementing a recruitment freeze.
It would also appear that all sectors of the economy, as well as younger and older workers, are being hit hard. The survey found that the net employment intentions figure is now negative for all three main sectors – private, public and voluntary – for the first time since the report started in 2004.
At the time of the survey, John Philpott, chief economist at the CIPD, remarked: "We’ve always said that the worst of the recession for the jobs market will be felt in the first part of 2009, and unfortunately we’re now finding ample evidence to support our predictions. It is unsurprising that the private sector is being hardest hit. But here is evidence for the first time that the public sector is beginning to feel the pain."
School leavers and graduates are also swimming in troubled waters, with 45% of companies admitting they do not plan to recruit from either of these groups; whilst one in seven employers said they would exclude workers aged 65 and over who are not currently employed.

Good talent is hard to find

Head of recruitment at KPMG, Ruth Elwood, said that recruitment levels at the professional services firm have certainly dropped over the last year, yet it remains active in both graduate and experienced hire markets.
"Our focus has always been on recruiting the highest calibre individuals into our firm and the downturn does not change this approach," she says. "However, there is undoubtedly a larger pool to select from which makes our selection tools even more critical to identifying individuals with the right skills for this current climate and our future business."
And this is another impact of the recession on recruitment – the fact that many organisations are finding it difficult to recruit quality, partly because there are suddenly many more CVs to sift through, from a larger pool of candidates who have been made redundant, and partly because they are simply unable to waste valuable time and money on the wrong candidate.
"The cost of making the wrong hire has never been greater than in today’s economic climate," remarks Christine Raynaud, CEO UK & Ireland at recruitment and talent management specialist Hudson. "As the war for talent changes to a hunt for talent, recruitment decisions are harder to make than ever before with applicant numbers rising so sharply. Good selection methods are critical to help organisations limit the risk of their hiring decision."
Employers therefore need to become more effective at selecting the right employees by implementing successful screening methods.
"Tighter selection screening is vital, and to this end businesses need to be clear on the skills and competencies they need in their hires, now more than ever," says Elwood. "The approval to recruit for a role is tougher in this climate and the expected return on the investment of a hire is higher than ever, so an employer needs to absolutely understand the role and their business needs to ensure they recruit the most able and suitable candidate ."

The right person for the job

Matthew Parker, group managing director at recruitment software provider StepStone, says that employers want to be more sure about bringing the right people into the business, yet he adds that the other big issue is finding that talent because they are the ones who are not actually looking for work right now.
"Where there is talent, people are much less willing to move now than they would have been 12 months ago and they are sitting tight," he explains. "In many organisations, there is a great deal more retention of quality going on, due to the renewed focus around talent management and succession planning."
This, he says, creates conflict in the jobs market because the market is getting thinner, yet expectations are getting higher, and the two have a direct impact on each other.
"There is no doubt that right up to the senior level of organisations, there are exercises going on that show what their most important positions are and who their most important people are, and making sure those people are on board and are part of the retention strategy," adds Parker.
So, has the recession had a direct impact on the outlook for recruitment over the next few years?
"The outlook is still uncertain so it is important for all employers to have a robust resourcing model that is linked to realistic business and market growth, and to constantly review in light of these changes," advises Elwood.
Parker hints that there is an opportunity for HR to become synonymous with value-add. "HR is having to do things smarter now, so I think technology use will increase in both recruitment and retention, in terms of performance management, succession and so on. Also, there will be the use of more creative channels, such as social networking.
"Plus, the approach to building long-term relationships with employees and potential candidates is likely to accelerate as a result of this recession. The whole use of the internet and online media, in its various forms, will become the de-facto route for organisations looking to recruit and retain," he concludes.

One Response

  1. The impact of the recession on recruitment – recruiters view

    Hi I read this post with interest and thought it matched up well with an article i wrote for the website which outlined how the recession and web 2.0 were changing recruitment methods.

    Regards Grant Bodie

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Lucie Mitchell

Freelance journalist and former editor of HRZone

Read more from Lucie Mitchell

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