Taking Advantage of a Down Economy With Investment Hiring

With each day's headlines announcing new corporate layoffs, rising unemployment rates, and an increasingly volatile stock market, it may seem counterintuitive for businesses to place much, if any, importance on hiring new employees. However, for companies with the foresight and optimism to think beyond the recession, there are a number of great reasons to take advantage of the current economic climate by putting an increased emphasis on strategic hiring. In fact, companies who do so may be improving their odds of not only surviving the economic downturn, but emerging from it stronger, more productive, and better-positioned for long-term success.

Hiring While the Others are Firing

The obvious reason to consider hiring in the current economic climate is simple: great candidates are in high supply. Widespread layoffs have created a huge pool of prospective employees, many of whom have years of experience and expertise to offer. These days, employers have a unique advantage in being able to select from a wider pool of talent at a significantly lower cost, yet many fail to take advantage of this opportunity by thinking short-term about their staffing needs. According to research in the Fall 2008 issue of McKinsey Quarterly, "finding talented people (is) likely to be the single most important managerial preoccupation for the rest of the decade," but "too many firms still dismiss talent management as a short-term, tactical problem rather than an integral part of a long-term business strategy."

Despite its many negative consequences, the current down economy does provide a unique opportunity to line up top industry talent that may have been unavailable or unaffordable just months ago. Think of it as potential "investment hiring:" a chance to add some top-performers to your team who can help carry your company through the current recession and into a strong future.

Making the Most of Your Hiring Dollars

Though hiring in a down economy is a smart strategic move, it's important to remember that the hiring process can also be expensive if done inefficiently. Companies looking to take advantage of the current job market while still cutting back on HR expenses should consider the following tips and guidelines for effective, affordable hiring in a down economy:

* Be Selective: Remember, these days it's a buyers' market when it comes to the hiring process, and a bad hire is an especially tough expense to bear in a difficult economy. That means it's a good time to streamline hiring processes and get increasingly selective about putting together a team of the best and brightest, even if it requires more time waiting for your ideal employee. In a good job market, employers are prone to making hasty decisions in fear of losing their job candidates to other opportunities. In a slow job market, however, you can afford to spend more time carefully recruiting, screening, interviewing, and verifying prospective new hires. Make sure that in sifting through the large number of job applicants, you're choosing to interview and/or hire only those candidates who can demonstrate proven results and excellent performance in their previous positions.

* Take Advantage of Contract Employment: Hiring 1099 contractors rather than regular W2 employees can be a cost-effective way to take advantage of some of the top talent available in the current job market. It can also be a great way to bring former full-time employees or retirees back on board after forced layoffs or early retirement. In doing so, you'll be re-hiring those tried-and-true workers who are already trained and familiar with your company's procedures and policies, resulting in lower hiring and training costs and a much shorter time-to-productivity. Plus, because contractors work on an as-needed basis, you'll pay these employees only for the hours necessary to complete a task or special project.

You can also utilize contract positions in "trial hire" situations, payrolling them through a 3rd party employer of record for a probationary period of time. Once the pre-determined trial period has ended, the contract staffers who have proven to be a successful match for your company can come on board as regular employees.

* Stay Competitive: Though it may not seem to matter quite as much in the current job market, once you've secured your ideal employees it's critical to build their satisfaction and loyalty. After all, your "investment hiring" won't be much of an investment if it walks out the door at the next available opportunity. Make sure you're providing employees with competitive salaries, attractive benefit programs, a positive work environment, opportunities for growth, and plenty of reasons to continue contributing their unique talents and skills to your business. In doing so, you'll ensure that the winning team you've assembled will stay together even after the economy inevitably improves and jobs become more plentiful.

When the recession comes to an end (and it eventually will), the forward-thinking decision to utilize investment hiring will likely place your business among those who surface from the recession re-energized, more productive, and backed by one critical strategic advantage: the best employees your industry has to offer.