What's the best hiring strategy during a recession in NZ?
Being a small market, New Zealand sees the impact of economical conditions swiftly. It is an unfortunate truth that during a recession, employers post fewer vacancies, and the number of job seekers multiplies. However, it is an interesting question if contracting or permanent employment are better suited to market conditions during times of an economic downturn.
Five things to consider when doing your workforce planning for a potential recession:
- Length and depth of the recession – is your business sustainable for x period of time with the employees you have, or do you need to consider realignment to suit the economic conditions. Should anyone leave – would you consider a contract option as it may pose less risk should you need to restructure.
- Company budgets and strategies – is your business foolproof to the downturn? And if not, where can you put in cost cutting measures to ensure business survival? Do you rework your 3/5 year business plan to focus on more short term goals that will help see your business through the toughest time. Does this require contractors to support shorter term initiatives?
- Number of job seekers - with NZ being a tight talent market, do you risk needing to secure that skilled talent again when the economy improves or do you consider other ways to retain the talent. Employees typically are loyal to those that look after them in troubling times. Typically, employers cut deeper than necessary so retaining (where possible) permanent staff with strong knowledge of your business will be important to help you lift out of the downturn quicker.
- Number of available positions - Finding talent is challenging and can take longer than expected when looking for specific skill sets. Can you consider a contractor to help keep momentum on business critical strategies if the right permanent employee cannot be found.
- Reputation of your company in the marketplace – like we saw during Covid, people genuinely want to look after businesses they care about. Focus on your internal Employee Value Proposition for your staff as well as the service you provide to your customers and your reputation should help you navigate the first few months of uncertainty.
There are plenty of other things to consider but these considerations will help point you in the right direction for your business. The first few months are the toughest as companies continue to test what is right for their business. Once there is more economic data to support your planning, you can start to think longer term about growing your permanent headcount gradually to meet your strategic goals.