Thought LeadershipRecruiting Best Practices

A letter to the industry: Why strategic recruiting is just as critical during a downturn

Richard Cho

Richard Cho

Strategic Advisor

Posted on

May 31, 2022

Against the backdrop of rising inflation and weak stock market performance, the recruiting industry is experiencing yet another unsettling moment. We’ve exited one of the largest growth periods tech has ever seen—from 2009 onwards—and even the organizations many of us look to as model companies are now reducing costs. Meta is pulling back hiring significantly through the end of the year. Cameo laid off a quarter of its workforce early this month. DoorDash is slowing headcount growth—as are Uber, Netflix, Noom, and others. And Robinhood—where I spent nearly three years helping usher it through its hypergrowth phase—laid off 9% of its workforce last month.

Of course, that last piece of news was particularly hard for me to hear. No one wants to see the people they hired into a company get impacted. I still feel very emotionally connected to the team at Robinhood, and I know there’s some pain there—and in the industry broadly speaking—right now. Recruiting professionals’ primary focus is to help grow a company; and if the company makes an explicit decision not to grow anymore, that’s disquieting. 

If I was still at Robinhood, it would’ve been my place to stand up in front of the organization and offer advice. What’s below is what I would have shared. Because if you’re in the industry, you might be feeling like this is it; the sky has fallen. But in fact, there’s a silver lining there. So this is a letter about why I haven’t given up on talking about the importance of strategic recruiting during a down economy—and why I don’t plan to. ‍

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If you’ve entered the talent acquisition profession at some point in the last 10 years, you haven’t experienced a downturn like this. The pandemic was only a blip: hiring promptly raged back, and the demand for recruiters was at historic highs. The moment we’re in now is likely not a blip. But as a 20+ year recruiting veteran, I’ve worked through three such downturns. The 1998 Asian Economic Crisis deeply impacted Silicon Valley because of the relationship between Asian manufacturers and tech companies; I was at a staffing company called Hall Kinion in the latter half of that year. In 2001, when the Dot-com bubble burst, I was an Employment Manager at Echelon. In 2008, during the sub-prime mortgage crisis, I was a Recruiting Manager at Facebook. 

In the 2001 downturn, many people left the talent acquisition industry—literally walking away from their professions. They became mortgage brokers or real estate agents; they went into sales. This was so often the case that it became a running joke: if you were a recruiter before the downturn, you were a mortgage loan agent on the other side. As for me? I didn’t become a mortgage lender. I stuck around. 

When the Dot-com bubble burst, Echelon—like so many companies—reeled in response. We had to freeze hiring, but my manager and mentor saw how hungry I was to learn all aspects of the business. He intuited how valuable I’d be as an individual contributor in any number of other roles. So he retained me. 

I call that period of time my “real-world MBA” because of the remarkable learning curve it offered. I was asked to support an executive in getting the company ISO certified, so I learned ISO 9001:2000. I was asked to be a stock plan administrator and a comp analyst. These felt like one-off projects at the time; but what my manager was ultimately doing was making me a better talent acquisition professional. I learned about stock plan administration; I learned about comp; I learned how to run an efficient business. All of these things built out my toolkit to be a better recruiting professional downstream.

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And the market turned around again—as it always does. I want to stress this because it’s a constant in every downturn: we bounce back. And every time we bounce back, businesses demand a re-growth strategy. If you’re a company with an established value proposition and solid fundamentals, you’ll always need to hire aggressively again. And I’m not talking three years from now. I mean a return to aggressive hiring within 6-10 months of a decision to freeze it. In each of the downturns I’ve worked through, I felt unprepared as a recruiting professional when the hiring faucet turned back on again. I felt the weight of a heavy and urgent req load on a minimally-resourced team because the company had reduced recruiting headcount to cut costs. Each time, I desperately wished I’d been better prepared for the inevitable snapback in hiring.

A Message to Recruiting Professionals

So to the recruiting practitioners who are still in your roles—who are maybe feeling a bit of survivor’s guilt, who are maybe waiting for the other shoe to drop—my advice is to remember there’s still plenty of work to be done. You now have the bandwidth to do all the things you’ve always wanted to do but haven’t been able to because hiring has been so frenzied. That includes building and nurturing pipelines, optimizing your candidate experience, attending to your referral program or employer branding. It means training your interviewers to be more effective and less biased, and having more meaningful conversations with your hiring managers to prepare for the return to hiring. Do your job descriptions need revision? Is your interview process as inclusive as it could be? How’s your data integrity? What skills would you like to master as a TA professional—regardless of what role you’re in in the org? 

In short, this is the time to make your systems world-class and your processes more thoughtful and meaningful. Keep focusing on what you love—and take the time and space to focus on yourself. The market will open up again. And when it does, you’ll have a recruiting function that’s been fully optimized to hire the best people to get your business back in stride. And you’ll be an even more valuable partner if you’ve also used this time to prioritize learning and self-care.

A Message to Talent Leaders

Talent Leaders: you have both a responsibility and an opportunity right now. You’ve got a fully engaged (if anxious) team that’s looking for work that will enrich them. This moment is an invitation to do the things as an organization that will set you up to be a better strategic partner to the company when hiring ramps up again. The three areas to focus on, in my book, are: 

  • Headcount. Revisiting how you think about recruiting capacity, then aligning current resources to headcount forecast to meet those demands. This is a great time to revisit headcount planning in general: sit with Finance to devise a more effective way to forecast headcount which factors in a more accurate recruiting capacity model. Then you’ll be able to support the timing of hires against that headcount when the business opens up again.

  • Diversity efforts. Thinking deeply about innovative yet effective diversity hiring practices. Start having those conversations with key leaders and transforming your hiring process to remove bias so you’re better set up to deliver on diversity a few months down the road.

  • Upskilling your team. Double down on training, mentoring, and investing in your staff. The best way to retain the team is to help them develop their skills—

    especially when the workload is lighter than it’s been. Elevate their skills now so that when the market comes roaring back, you’ve got a remarkably skilled team to tackle it.‍

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Many recruiting organizations assume that the velocity of recruiting is a simple formula of the number of resources you have on staff, which equals the number of hires you can ultimately make. In actuality, it’s possible to double, triple, or quadruple process efficiency with exactly the number of resources you have now by identifying inefficiencies across every step of the funnel. Now is the time to use tools like Gem to identify areas of improvement and tackle them—especially if you’ve recently reduced your organization. The last thing you want is to have a team that can't handle the req load when the market comes back with vigor. So it's important to create a long ramp to strengthen yourself for the next hiring spree. Be the department that’s prepared when the race to gain market share through hiring begins again!

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A Message to Executives and Business Leaders

Business leaders, executives, and founders: this is a time not just to focus on cost-cutting, but really to think about the company you want to become. Reinvest in thinking about how you structure your organizations to avoid scenarios where you have redundant staff moving forward. Do all the house-cleaning you haven’t been able to do during aggressive growth phases. And importantly: bring your talent acquisition leaders along, because they can provide important insights into how your competitors are investing in their growth. They’ll also have a clearer picture of how to build a talent acquisition strategy to support the growth of the company you want to become. 

My final piece of advice to business leaders is that hiring—or rehiring—recruiters when the market returns is one of the hardest things to undertake, because everyone will be doing it at the same time. I was at Facebook during the 2008 downturn when companies like Google paused hiring and started laying people off. Facebook’s strategy, on the other hand, was to bring in the best talent we could to support the growth trajectory we were on. So we hired all the recruiters those other companies were letting go of. And when the market came back—not more than 10 months later—Facebook was thriving. 

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Many veteran TA leaders, having seen the same cycles I’ve seen, are advocating for retaining more resources than the math suggests right now. To justify those resources, they’re finding ways to allocate them to other parts of the business—much like my mentor at Echelon did with me. It’s a strategy worth considering. Not only will your recruiters better understand the nuanced ins-and-outs of the organization when it’s time to return to recruiting full-time (and be better resources for candidates for that reason); you’ll also have more loyalty over the longer-term.

It’s possible that your team is starting to see the quality of inbound candidates increase, and that makes sense. After all, if many companies have stopped growing, top talent who are hungry for career growth may be looking for opportunities elsewhere. Work on a process that allows you to be faster and more responsive to those inbound candidates. Consider using tools like Gem to nurture relationships with inbound candidates and keep them engaged while you figure out the backside of this downturn. Attend to your talent brand, build a strong andauthentic message around why you’re still growing (or why you’ve decided to pause), and market that accordingly. As counterintuitive as it might seem, this is a singular moment to bring in top talent that aligns with your company mission.

I’m still deeply feeling for my peers right now. But when I remember the long view, I have a great deal of confidence in the industry on the whole. I also have a great deal of certainty that the pattern will continue: companies who’ve used downturns as opportunities to elevate the skills of their recruiters, thoughtfully optimize their processes, and plan strategically for the next wave of hiring have always come out of these phases stronger. That’s an exhilarating place to be.

And those are the companies we should all model after.


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