I’ve seen a lot of these recently:
“In the current climate, we’re placing all hiring on hold. No new roles will be listed, and recruiting for existing roles will be postponed until the pandemic has passed. It’s less than ideal (a lot of our teams would like more resource), but it’s a difficult time for us all and we’ll have to find ways to work with what we’ve got. We have great creativity and resourcefulness, so I know we can make this work!”
Should we be freezing, or not?
I’ve been a team lead during two recessions (the original dot-com crash, and the subprime mortages collapse), and picked up a few observations along the way.
When you freeze, what happens?
Your costs drop immediately – but not by as much as you might think.
Most companies invest only small amounts of cash into recruitment itself, instead pouring in time. Saving time in a recession isn’t a big win: if your customers have gone away, having employees with extra time on their hands provides little benefit, since there’s no extra targets for them to sell to / create for / support. Not great.
The big expense is the ongoing salary burden after you hire someone: this is a recurring commitment, and the numbers are big (and you have to add employer tax, office space, etc). But the salary cost doesn’t kick in until weeks – or, usually, months – after the recruiting finishes. Paying monthly in arrears, and the hiree’s notice period of 2 months … the absolute minimum is already a 3 month delay before paying-out (assuming your recruiting is lightning fast, and happened instantly! Time To Hire (TTH) usually adds an extra few months on top).
When you unfreeze, what happens?
Many companies are freezing, or heavily downgrading, their hiring right now. Some are still recruiting but officially (or unofficially) not intending to make job offers. When the pandemic eases off, they’ll all take it in turns to re-start hiring, giving each other a fair chance at the candidate pool, and waiting their tur–oh, wait.
It’ll be a feeding frenzy; after months of zero hiring, tech teams across the world will be desperate for new staff (who they were already desperate for back when they started the internal request to hire a new team member). Everyone will be competing with everyone else, all at once, for a stricitly limited, non-scalable, talent pool.
Unfreezing also means warming-up your recruitment engine from scratch. Recruitment has a long latency – it can easily take months for actions to bear fruit (e.g. attending a networking event where you meet a high-value candidate who hasn’t yet decided to leave their current role – but months later comes back to you applying for a job). With your recruiting shutdown, you – and everyone else – has to wait for it to warm up. And that wait just builds even more pressure and demand for hires.
Worse … unlike companies, candidates are a single individual, and individuals don’t “scale”. As a candidate: if I get one job interview a week every week for a year … I can attend them all. If I get 52 job interviews in a single week … I’ll have to reject most of them unseen. The company can hire extra HR staff to interview more people at once – but I cannot hire extra people to go to interviews for me (interesting idea, though…).
What else could you do?
When the stock market crashed last week, and the week before, then the investors with cash to spare stepped in and bought large numbers of stocks at bargain-basement prices. They see and fear the economic effects of the pandemic as much as anyone – but they know that each stock has an intrinsic value, and that post-virus those stocks will tend to surge back towards it. Buying now is an easy way to make large profit.
In the job market, candidates are now scared. They cannot “freeze” their job-search – if they were already searching, then they NEED that job now (to pay rent, to buy food…). If they disliked their current job before, they probably hate it now (with the stresses of working from home, the fears around personal health…). The most in-demand candidates – who can pick and choose where to work – are looking for safe-havens; what better sales message could your recruiting team have than “We’re so well-financed, and confident in our business, that we’re still hiring as actively as before”?
If “finding more of the high-quality candidates” has ever been a challenge for your company, you shouldn’t be freezing it now – you should be taking this opportunity to find your next cohort of great people.
A final thought
The companies that hire at huge scale – the Facebooks, the Amazons – are cash-rich, long-term focussed, and see hiring very much as an investment (more of a capital expense than an operational one). They’re not going to stop hiring; should you?
If you’d like to read more…
I’m writing a book on how to be excellent at Tech Recruitment, aimed at tech businesses from new startups through to SMEs and scale-ups:
... Learn from my 15 years of product and tech hiring
... Reduce time-to-hire, and increase candidate acceptance rate
... Get emailed when new articles go live, pre-launch book info, etc