The UK job market is irrefutably hot right now, boasting one vacancy for every unemployed person, which is a first since before the pandemic. Yet despite this growth within the job market, driven primarily by the phenomenon that is the great resignation, the UK economy is flirting with a recession, which leaves hiring managers and HR practitioners in an interesting position.
While we’ve faced, and overcome recessions in the past, this one is fundamentally different, owing to the current talent shortage, with some of the UK’s top talent, jumping ship for better opportunities. Based on this, businesses are changing their strategies, proactively casting their minds back to the challenges they faced in the 2008 recession. And with the demand for permanent staff steadily on the incline in both the short-term and long-term, staff retention is now paramount.
Employee retention should be less challenging as more and more employees start prioritising job security over moving jobs for a higher salary (given also that those higher salaries are less likely to exist). But following the recession, companies will be much more likely to retain their best talent if they do the right things now.
There is a popular opinion that the upcoming economic instability could eventually stabilise the talent shortage, putting hiring power back in the hands of businesses, but not before the recession has you rethinking everything, including your hiring strategy.
Many companies will find that hiring during a recession is in fact the best time to hire because of the very fact that our skills shortage will now come face to face with job uncertainty, turning the market on its head, and suggesting that recruiting in a recession can, in fact, be a cost-effective, and economically sound way of future-proofing your business.
As with any recession, we are sure to see fewer job opportunities, resulting in a slowing of the surge of movement between jobs, which is a big U-turn in the current buoyant labour market.
It's at this turning point where HR and hiring managers need to talk to their partners in finance and business strategy to pinpoint areas where the current structure of the business can become more flexible to adapt to the new economic conditions.
Operating with a renewed sense of agility following a 2-year pandemic, businesses need to be proactive in their approach and look for opportunities to redeploy people, using their existing skillsets, or reskilling them entirely to fulfil a new role. Reshuffle the cabinet so to speak and put the best people in the best positions, to make the right decisions for your business.
Perhaps there are options businesses could explore around flexibility in the hours people work that would enable jobs to be retained in difficult times. Or perhaps a flick back to a remote or hybrid working model to add to the perks of a new position.
Our stance is that by retaining their talent and continuing to hire quality staff through a recession, businesses will find it easier to return to normal once the economic pendulum swings the other way.
Instead of dramatic layoffs, businesses should energise and mobilise their teams, focusing on maintaining high levels of transparency, engagement, and communication, focusing on proactive workforce planning, and early realignment of hiring requirements.