Economists warn that a recession could be coming — but is that any reason to neglect your candidate’s experience?
A Bloomberg Economics model states there’s a 38% chance of seeing a recession in 2023 (similar reports place the percentage risk near 30%). And yet, one of the earliest indicators of a recession — a high unemployment rate — is nowhere in sight.
According to the latest Job Openings and Labor Turnover Summary, there were 11.3 million job openings in May, or roughly two jobs available for every unemployed worker. Meaning, that even with a recession on the horizon, the United States labor force still has ample opportunities to choose from.
And yet, the mere threat of a recession has many major corporations rescinding job offers. As stocks decline, VC money becomes increasingly hard to come by, and inflation soars, organizations are seeking to cut back on payroll. Companies like Twitter, Coinbase, and Redfin are doing the very thing that many hiring managers have complained candidates have done for months — backing out of an offer after it’s already on the table.
Allow us to be clear: Neglecting your candidate experience or rescinding job offers will make it difficult to attract top talent now, or at any time in the future. Below, we help hiring managers and executives make sense of this unique (and somewhat crazy) job market. In addition, we dive into how to be mindful of your budget while preserving your employer brand.
Why Rescinding Your Job Offer Threatens Your Employer Brand
First things first: “Trimming the fat” too quickly will put yourself in a bind from an employer branding perspective.
Employees are still quitting their jobs at alarming rates, with 4.3 million people leaving their job in May. As employers become increasingly desperate to fill these vacancies (and retain their best talent), it’s still a candidate-hot labor market.
When faced with multiple job opportunities, candidates will not choose a company who recently 1) laid off staff or 2) rescinded job offers. This holds especially true when recruiting early-career candidates. Current students and recent grads talk, and if you rescind an offer, your campus recruiters will find it increasingly difficult to attract top talent. Candidates in your pipeline will feel compelled to keep their options open, which could spike your renege rate.
How to Provide a Candidate-First Experience With a Threat of a Recession
Typically, a recession causes employees to become increasingly loyal to their employer, not wanting to risk unemployment with an unstable economy. However, in 2022, that’s certainly not the case.
A recent survey shows that 57% of employees nationwide plan to job search in the upcoming year — even if a recession hits. If their paycheck takes a direct hit, roughly two-thirds of survey respondents say they will look for new unemployment.
Therefore, hiring managers can’t afford to become lax about creating a candidate-first experience. Top talent expects clear communication, incredible transparency, and competitive compensation from potential employers. If a company fails to provide any of the above, they risk losing talent to their competition, thereby putting undue stress on current employees, and negatively impacting retention rates.
To help navigate this unique hiring market, follow the below steps:
1. Stay Away From Band-Aid Fixes
Many times, companies make the mistake of taking a reactive approach to the economical climate. We saw this trend when companies tried to circumvent spikes in renege rates with overhiring — causing their payroll budget and employer brand to take a direct hit.
Don’t allow the threat of a recession to erase any progress made with your hiring process. Instead, continue to provide a personalized experience at every stage of the candidate’s journey. If you make an offer, honor it; and keep your entire talent community updated on any changes in job openings.
2. Offer Competitive, Market-Rate Salaries
When the economy takes a hit, many business owners are tempted to spare budgets by lowering job offer salaries. While this is never a good strategy, it could be disastrous in today’s labor market.
Research shows that low pay was the number one reason people quit their job in 2021, followed by a lack of opportunities for advancement and feeling disrespected at work. Employees are no longer willing to accept below-market-rate salaries, even in a downturn economy. If you want to continue to recruit and retain top talent for your business, you’ll need to offer competitive compensation. If budgets are truly tight, consider getting creative with compensation, expanding your benefits package, or offering a bonus structure to incoming candidates.
3. Be Transparent With Your Talent Community
Candidates want to work for an employer they can trust. To be a trustworthy employer, you need to stay transparent with your talent community — even during tough times.
If you go through a hiring freeze or decide not to hire anyone for a given role, communicate this to your community as early as possible. While it’s never a fun conversation to have, taking the lead allows you to control the narrative, explaining that you’re pausing your hiring efforts due to the economy. A failure to do so leaves the narrative in the hand of your [now disgruntled] candidates, who will be extremely frustrated if they’re ghosted halfway through the interview process. Consider having an executive or your head of HR record a video or write a short email to your community, explaining your current predicament.
4. Increase Your Communication Frequency
In a volatile labor market, you need to increase — not decrease — the frequency in which you communicate with candidates.
As previously stated, a recession won’t stop the Great Resignation. Therefore, you need to create a candidate-first experience to recruit top talent and prevent burnout amongst current employees. One of the best (and easiest) ways to improve your hiring process is to improve communication with candidates.
According to CareerBuilder, 69% of candidates dropped off during the interview process due to poor communication from hiring managers. Every applicant — whether they just joined your talent community or are in their second round of interviews — wants to know where they stand. Therefore, increase communication frequency, touching base with candidates once per week or once per month, depending upon where they stand in their independent journey.
Use Scholars to Recruit and Retain Top Talent Through a Recession
Most economists agree that a recession is on the horizon. However, unemployment rates still hover near record lows while job vacancies soar, making it a candidate-hot labor market.
To ensure you can continue to recruit and retain top talent, employers need to avoid band-aid fixes, offer competitive salaries, increase communication with candidates, and stay transparent about current hiring initiatives. To accomplish all of the above, choose Scholars.
Scholars is the hiring platform built by early-career candidates for early-career candidates. Scholars bring a level of humanity back to the hiring process, allowing you to create personalized journeys at scale. With Scholars, you can schedule cohort meetups, launch a mentorship program, suggest reading lists and certifications, or connect candidates to their future managers.
Ready to see how Scholars can help you navigate the current labor market and create a better candidate experience? Schedule a demo to get started.