(4 min read)
Is your startup prepared?
It’s no secret that the caprices of the economy can lead to a hard turn downward sometime in the near future.
Unfortunately, there will be companies left wishing they had prepared for navigating difficult economic scenarios successfully. They will wonder whether or not to stop hiring or stay the course.
One organizational function that is often cut first is Talent Acquisition. The biggest mistake is overlooking the benefit of creating a solid talent strategy before the stop sign goes up.
The right investment in talent acquisition can help your business continue to thrive, ride the wave, and excel in a market where unprepared companies fade away. A carefully calibrated strategy will empower you to compete for talent amid economic downturns — the talent you still need.
I’ve been in the thick of every economic downturn since the dotcom bubble.
I’ve remained on top every time, thankfully, because of prudence in my strategic action and application of the right knowledge. Talent acquisition does not stop when the economy is in a recession. Economic uncertainty just means that the talent pool gets smaller while competition between companies for candidates surges.
In these scenarios, early to mid-stage startups are the companies often left paying the biggest price.
Medium to large companies typically have the luxury of extensive recruitment history in this kind of market. As a result, they react moreover react more efficiently having experienced the pain of costly turnover and lost profitability due to a lack of talent strategizing in this kind of market.
Experience enables them to adjust accordingly in economic downturns, which has protected them from making the same mistakes moving forward. Comparatively, early-stage startups put the cart before the horse and are left behind because they lack a formal strategy. Not only do they miss the opportunity to continue hiring who they need to thrive in the economy, but they also cannot retain the employees they have.
It’s not just about hiring in an uncertain market, it’s a retention game.
But early-stage startups don’t have to be the companies that take the biggest hit. They just have to invest early in creating a talent strategy that can both compete and retain employees — ensuring their foundation is solid.
Unprepared startups are consequently risking hiring and retaining employees along with their own financing ambitions.
As it relates to talent acquisition, companies can prepare themselves in various ways, but none are more powerful than crafting an unshakable and effective talent strategy.
Here are some key aspects to examine before a potential economic downturn:
Create a customized talent acquisition strategy: This may seem daunting, or you might be thinking its for larger companies, but it’s not. It all starts at the first hire. It is much simpler and cost-efficient than it seems. Custom strategies will not only support profitability in an economic downturn prepare you for when the market swings back the other way.
Train your hiring managers and teams: You are only as good as the people who are hiring for you. Even if you have a reputable superior, your staff are hiring experts unless they’ve been trained properly. In early to mid-stage startups, less than 10 percent of employees are trained as experts in hiring. Not aligning as a team leaves companies at a major disadvantage in the market, no matter if the market is in a boom or bust cycle.
Optimize and create a differential candidate experience: The experience of each candidate in the limited window with your team is defining. By ensuring that you know all aspects of creating the best experience, you increase your chances to have more candidates considering your employment by over 86 percent. This metric also translates to them accepting your offers versus the competition.
Align yourself with the right talent advisor/recruiter: Whether it’s to find new talent, or retain the talent you already have, careful selection of advisors and recruiters through a market dip is key. Most startups wait too long to ensure they have the right partner in place. Those who work in the talent acquisition field are not all equipped with the same knowledge and capabilities. It is critical to successfully maneuver your entire company through this sensitive stage.
Continue brand awareness: Hiring or not, you must continue to remain a prominent brand in the world, specifically in your niche. You can do this by creating external articles or other means, but the best way is to utilize your current employee base as your brand ambassadors.
Continue to network and create connections: Networking has become one of the most profitable avenues to acquire candidates. It holds true even for an underperforming economy. Whether or not your hiring must be put on hold, networking should remain at the forefront of startup visions as it will help you ride the wave.
In a down economy, history reveals that even startups can thrive. But it is those that are prepared who endure. Whether waiting for funding, riding the wave of a down economy, or on the upswing of scaling growth, investing in a talent strategy should always be your cardinal investment. An appealing ROI will follow and furnish you with a better chance to become one of the ones that thrive in a down economy.
No matter the economic cycle, you can win.
Written by Alana Fulvio, Pendulum, LLC Founder.