April 2009, Hiring In a Recession

The prevailing thinking in this economic environment is that it's a buyers market with respect to finding people. However, while it may be easy to find average talent, ordinary people don't solve problems. Identifying and evaluating the right people and making smart hiring decisions are not as easy as they may seem. In the February issue of CFO Magazine, Scott Leibs writes how many companies are laying off by the hundreds, but others still have their doors open to new hires, if they can make the grade.

Leibs cites several executives who agree that the time is right for companies to reevaluate their rosters and determine which areas need to grow and which need to shrink as their strategy evolves. It is understandable that in the current economy, companies are putting talent management on the back burner, but a rising unemployment rate does not necessarily translate into a great bargain hunting opportunity, In fact, the converse is probably more accurate. Top talent does not get laid off as readily as other employees, which makes it much harder to find "A" players as job seekers increasingly multiply and the market becomes overcrowded.

Executives may be inclined to feel that perception and reality are two good reasons not to hire right now. Obviously the need to contain or cut costs is the stark reality; while the perception problem is based on timing and the appearance that any hiring being done concurrent with layoffs may send the wrong signal to an organization's stakeholders.

Leibs notes that the most challenging aspect of hiring during a recession, especially at a company that is reducing its workforce is striking a balance between boldness and prudence. Waiting to hire may mean competing with every other company when things improve. On the other hand, adding staff must be done in a careful and deliberative manner to avoid costly mistakes. It is critical that the need is real and that any new hire is properly vetted. The key is to design the organizational chart for where a company wants to go and then fill in the gaps.