It’s no secret that the tech industry has been booming in recent years. With the advent of new technologies and the growing demand for skilled workers, the industry has seen unprecedented growth. However, with the current economic downturn, many companies are trimming their budgets and cutting costs wherever possible. At times like this, it can be hard for tech companies to justify investment in talent acquisition. Business leaders wonder whether they should keep hiring tech talent or wait until the economy improves.
There are numerous reasons why it makes sense to keep hiring tech talent during a recession. Before we go any further, consider these tech companies that were set up during periods of economic recession:
- Microsoft was founded during the oil embargo recession of 1974 – 1975
- The Federation of Small Businesses – not exactly a tech start-up, but an organisation which has helped many UK businesses thrive – also began in 1974
- Adobe was incorporated shortly after the double-dip recession of the 1980s
- Slack Technologies first began as a company called Tiny Speck during the great recession of 2007 – 2009
- Synergy Cloud came to fruition during the lockdown of 2021
Sure, there may be slower growth during a recession, but the tech industry is still growing. There is still a demand for new and innovative technologies, and companies need skilled workers to develop and implement those technologies. So without further ado, let’s look at the four top reasons businesses should keep hiring tech talent during a recession.
5 Reasons to Keep Hiring Tech Talent During a Recession
It’s a counter-cyclical way to stay ahead of the competition.
It may seem counterintuitive to keep hiring during a recession, but it can be a counter-cyclical way to stay ahead of the competition. While your competitors are cutting back on hiring, you can swoop in and snag the best talent. Maintaining recruitment activity can help you keep up your momentum and even pull ahead of your competitors when the recession ends.
Moreover, continuing to hire throughout a recession can help you maintain a healthy talent pipeline. If companies only hire when they have an immediate need, they may struggle to compete when the economy rebounds.
Conversely, keeping a steady stream of talent coming in enables companies to keep promoting their employer brand and grow their talent pool. Positioning themselves for future growth allows them to emerge from the recession stronger than ever.
Keep up with technological advancements.
In a recession, many businesses make the mistake of stopping hiring altogether. They believe that implementing a recruitment freeze will enable them to save money and weather the storm. However, the opposite is often the case. Allowing open roles to remain unfilled means businesses lose out on talented employees who could increase their competitive advantage.
Although, when the economy is struggling, businesses must be more efficient and leaner to survive. That’s why savvy business leaders invest in new technologies and processes to help them operate more effectively.
Hiring talented employees who are up-to-date on the latest technology enables businesses to develop new products and services that will help them stay ahead of the game.
For example, investing in top talent who understand machine learning enables companies to automate processes and improve efficiency.
Technology can also help businesses reach new markets and customers. Even in a recession, there are still potential customers out there. They may be harder to reach, but the right technology can help businesses connect with them.
Weather an economic downturn and emerge stronger.
Even though a recession may lead to a reduction in consumer spending, businesses must still invest in technology to remain competitive. In fact, during a recession, companies may be even more reliant on technology as they look for ways to cut costs.
When the economy is struggling, businesses must be more efficient and leaner to survive. This often means investing in new technologies and processes to help them operate more effectively.
Businesses that maintain or increase investment in R&D during a recession are more likely to emerge from it more resilient than their competitors. Investment during quiet economic times enables them to continue innovating and developing new products and services ready for economic growth.
Hire Employees Who Are More Likely to Stay Long Term
It’s an unfortunate inevitability that some really talented people will lose their jobs during a recession. For those who do, job security and long-term stability will be a high priority.
These unfortunate individuals want to work for companies that are invested in the future and are willing to weather the current storm. For these workers, a recession can be an opportunity to find a company that is a good fit for their skills and long-term career goals.
Redundancy is one of the most stressful situations an employee can possibly find themselves in. Consequently, those who experience redundancy are more likely to be highly motivated and loyal to their future employers.
Acquire top talent at lower costs.
Recessions often create many redundancies. However, it is essential to remember that the technology sector has historically been relatively resilient to economic downturns. In fact, during the last recession, the tech sector was one of the few areas of the economy that continued to grow.
As such, the tech sector is suffering a global talent shortage, and the cost to hire tech skills increased sharply when the economy recovered. Companies that dilly-dallied in their recruitment decisions lost out on talented tech professionals and then had to pay more for scarce skills upon emerging from the recession.
Widespread redundancies throughout the labour market mean a surplus of talent is available. Therefore companies can be more selective in their hiring. Additionally, businesses can often get top talent at lower costs than during more prosperous times.
Our Advice to Employers Hiring During a Recession
The demand for digital solutions to practical problems keeps growing, even during a recession. So if your business doesn’t snap up the best available job seekers, your competitors will. However, if you are to keep hiring tech talent during a recession, here are our top pieces of advice to employers:
- During times of economic downturn, there are likely to be more talented workers who are between jobs or who are looking for a change. If a company is looking to hire, it should focus on finding the best candidates, not just those currently unemployed.
- If you’re looking to hire tech talent during a recession, focus on long-term strategic hires to help your business grow and adapt. Seek talented workers who value stability and are a good fit for your company culture.
- Continue to focus on employee engagement and nurture your existing talent. While it may be tempting to cut costs by reducing headcount or cutting investment in upskilling, this can actually put you at a disadvantage when the economy improves.
- If your organisation is looking to reduce costs, instead of cutting back on recruitment, why not review your hiring processes? In addition to lowering recruitment costs, removing bottlenecks in your recruitment pipeline can help onboard candidates faster, improve your employer brand and increase acceptance rates from top candidates.
A Few Final Thoughts on Why it Makes Sense to Keep Hiring Tech Talent During a Recession
Periods of economic downturn can be challenging, but to ensure long-term success, it makes sense to keep hiring tech talent during a recession.
While it may seem risky, there are several good reasons to keep hiring during a recession. By staying ahead of the competition, maintaining a healthy talent pool, and positioning yourself for future growth, your business can come out of recession stronger than ever.
Those businesses that survive have a rock-solid recruitment strategy to see them through hard times. Strategy planning is just one way that recruitment agencies can help their clients. Our extensive market knowledge can help you gain a clear competitive advantage in navigating hard times.