The U.S. is in a recession, and will remain there for at least the first half of the year, with economic growth predicted to decline a staggering 26.5% in the second quarter. The latest unemployment claims show 33.5 million American workers – or one in every five working Americans – have filed initial claims for jobless benefits from mid-March through early May. To put it in perspective, during the Great Recession, it took two years for 8.6 million Americans to lose their jobs. This is no normal recession. It is pandemic-driven, something we haven’t seen for more than a century.
To slow the spread of coronavirus and save lives, businesses across the country closed down as more than 300 million people nationwide were told by state and local governments to stay home. Such measures ground the economy to a halt in a breathtakingly rapid timeframe. Even now, as businesses and communities grapple with how to safely open up, uncertainty about how this could impact the course of the virus has made it clear that we won’t be approaching normal anytime soon. We will likely contend with various degrees of openings and closings due to anticipated waves of COVID-19 cases.
While this recession is hitting almost all sectors of the U.S. economy, the most significant impact is being felt by certain industries, including leisure and hospitality, travel services, transportation, and oil and gas extraction.
Moreover, the COVID-19 recession is creating supply and demand issues. On the demand side, while initially travel & tourism spending plummeted, historic unemployment and decreased stock market value already have caused a sharp decrease in consumer spending, with retail sales plunging a record 16.4% in April, the biggest decline on record. Massive supply chain disruptions are occurring as factories shut down, production slows, and inventory decreases. And, faced with a shortage of parts from overseas, many goods are unavailable.
When all this is applied to staffing and recruiting, flexibility, adaptability and speed are crucial. In order to survive and support their employees, candidates, clients and communities, organizations must be ready to pivot quickly in response to the effects of this recession. While PSG has shared its recession readiness perspectives in the past, due to the unique nature of this downturn, we’re offering insights into how staffing and recruiting professionals can best weather this unique storm and build a foundation for success coming out of it.
Weathering the Storm
- Refocus capacity where there is demand, but stay nimble because demand is changing constantly
As we redefine “normal,” now is not the time to do the same thing you’ve done in past recessions and downturns. Staffing and recruiting professionals must identify areas of their businesses that are growing and then quickly redeploy resources to those areas. For example, in healthcare, areas such as dentistry, plastic surgery, radiology and dermatology initially took a hit as patients postponed any diagnostic tests, check-ups and elective procedures and surgeries. During that same time, demand for workers throughout urgent and emergency care grew, with recruiters in some areas seeing a 30 percent surge in demand for temporary doctors and nurses to treat patients battling COVID-19. However, as businesses across the country began to open, healthcare work that was displaced is starting to come back.
While industries such as healthcare could see demand for essential workers skyrocket, then relax, and then increase again, other industries, such as retail and hospitality, could see the opposite trend as the virus ebbs and flows. The last thing an organization would want to do in either scenario is to hire a slew of recruiters, then lay them off, and be faced with trying to rehire them when demand increases.
As we see more and more restrictions lifted throughout the summer and then face possibly tightening again in the fall as an anticipated second wave of COVID-19 hits, companies across industries – and the staffing organizations serving them – must lay the foundation now to manage through a rollercoaster of supply and demand changes as the virus peaks, diminishes, and then surges again.
In this turbulent environment, PSG can absorb the shock of swift shifts in demand for our clients. And, because we’re an external partner, corporations and staffing firms can scale us down quickly, knowing we can ramp back up when additional volume arises. Additionally, we have a broad range of experience across almost every job type, and a leadership team that is accustomed to moving quickly and thoughtfully as requirements change. By paying attention to the unanticipated effects of the crisis on your recruiting process, you can quickly identify changes to your candidate funnels. PSG can help you stay flexible if your recruiting funnel changes and you need to recruit more people than normal.
PSG in action
PSG recently worked with a call center company that was supporting a government department for COVID-19 response. The ask? Hire more than 30 virtual customer service representatives (CSRs) in one week. The agents needed to be bilingual, have a wired computer with high speed internet, and provide their own equipment. PSG quickly designed a custom solution and strategy that ensured the broadest market coverage of all recruiting channels. We targeted programmatic job advertisements of key locations to attract the highest population of Spanish speaking CSRs across the U.S. We used a proactive sourcing approach to identify and engage targeted candidates by companies, skills, and locations by leveraging a unique blend of our own technology and engaging content (voice & SMS) approaches. Ultimately, PSG hit the hires target set by our client while coming in under budget.
In healthcare, one of our clients was facing a surging need for respiratory therapists and nurses. To serve them, we redeployed our team to focus on those two areas, which are contending with incredibly high demand. PSG has the knowledge capital to get creative and get their attention, and was able to help them meet their hiring target.
- Keep your financial house in order
Make sure you don’t put your company in a risky financial situation. In other words, staffing firms should be careful that they don’t run out of money and corporate talent acquisition departments should be sure not to blow through budgets. Instead, stay hyper-focused on your financial projects as they evolve with demand, and cut costs where necessary. If at all possible, retain investments that are critical to your future capabilities.
If you’re a staffing firm, be prepared for a possible decline in revenues as sales decrease or clients are unable to pay for services. On the enterprise side, many recruiting departments will see budget cuts, so payroll planning is extremely important to ensure you’ll be able to pay your employees.
At PSG, we’ve set up triggers, so that if our revenues decline to a certain level, we’ll deploy specific cost-cutting measures; if they decline further, we’ll deploy another level of cost-cutting measures; and so on. While the initial cuts would focus more on slashing budgets, we are prepared to take more significant measures depending on revenue signals. As painful as this process might seem, you could jeopardize your organization’s solvency if you don’t create such a plan.
Making Decisions Now to Thrive After the Storm
- Rebuild your recruiting operation for the future, not the past
The winners coming out of this crisis will take this opportunity to rebuild their recruiting operations for the future. While continuing to do what you did in the past is easy and tempting, it is a surefire way to blend in with the pack instead of standing out when the crisis subsides. Or worse, you may emerge from the crisis obsolete.
Now is the time to rethink operating models and push yourself to question all aspects of your operations. In staffing, with so many remote workers, some companies may consider a more rapid shutdown of their branches. When it comes to enterprise talent acquisition, teams may lean more heavily on partners for both RPO and contingent RPO services, shifting business away from higher cost staffing agencies while keeping a lean in-house talent acquisition team to avoid waves of hiring/firing that could come with shifts in demand.
For example, PSG has deployed 95% of our resources in the Philippines to work from home. While we had been conducting a trial of work from home for higher performing recruiters, our success with the COVID-19-driven shift led us to accelerate our efforts to offer work from home benefits to employees more quickly than planned. If your business is slower, consider piloting process and technology changes in controlled environments so that when activity picks up, you have a solid and proven path forward.
- Invest opportunistically while others regroup
Many great recruiters and salespeople are suddenly available. If you have the resources to do so, now is a great time to make opportunist hires. If you’re a staffing company, perhaps there’s a weaker competitor you can acquire at a fire sale price, or a startup with great technology that saw its funding dry up and needs a strategic partner. Keep an eye out for investments in people, technology and organizations if you have the means to do so.
There is so much we don’t yet know about how this pandemic will affect industries and businesses. Flexibility and adaptability at speed are the name of the game this time around. Hunkering down won’t work as it might have in other recessions. Now is the time to be sure you can innovate for clients and quickly redeploy resources to areas that are in high demand. While people still need to hire, costs and flexibility are more important than ever. PSG has the technology and global workforce to deliver high quality hires quickly at the lowest cost, and the flexibility to meet rapid changes in your business. Learn more at https://psgglobalsolutions.com/contact/