The scale of economic growth being reported across the globe is a promising sign for businesses. After a year of uncertainty, optimism has taken over. As the recovery continues, one thing is certain: the importance of a robust talent acquisition strategy. Companies need talent to grow and as pent-up demand continues to be unleashed, the need for a long-term approach to talent acquisition has become more apparent than ever.
Pace of recovery
If we look at the pace of the recovery in more detail, global GDP is recovering at speed. This is because of the easing restrictions, the pace of the vaccination rollout and pent-up demand. It’s worth noting that the speed of the vaccine rollout varies depending on location. For example, at the time of writing this blog post (12 June), Canada and Israel are leading the way. Some 64.7% of the total population of Canada has received at least one vaccine dose, with Israel just behind at 63.3%. This is followed by the UK at 61.2%, the US is 51.9%, Germany is 47.7% and France is 44.8%, according to research from Our World in Data.
If we look at the economic growth in the US, GDP increased at an annual rate of 6.4% in the first quarter of 2021, according to the "advance" estimate released by the Bureau of Economic Analysis. Here in the UK, the economy grew by 2.1% in Q2. But that’s not all. The UK economy is set to grow at its fastest rate since WWII this year, according to the Bank of England (BoE). In fact, the BoE has predicted growth of 7.25% this year, up from its previous estimate in February of 5%. The prediction represents the strongest expansion since 1949 when official records began. Elsewhere, the European economy is also expected to grow more quickly than previously expected. In its Spring 2021 Economic Forecast, the European Commission suggested the economy will expand by 4.2% this year, rising to 4.4% in 2022. This is a significant upgrade of the growth outlook compared to the Winter 2021 Economic Forecast which the Commission presented in February.
Do the economic growth figures align with what we’re seeing in the jobs market?
In short, yes. As a global talent solutions provider, we’re experiencing record demand for our services as many companies ramp back up. A lot of organisations reduced their headcounts in 2020 and are ramping up at breakneck speed to capture new business and keep up with pent-up demand.
Being prepared sets up future success
The pandemic-induced recession (although short-lived compared with previous downturns) and subsequent recovery has highlighted the importance of taking a long-term approach to talent acquisition.
Instead of recruiting the talent needed to support strategic business goals, some organisations are now playing catch up to hire the talent they need for short- to medium-term business demands, such as the rapid pace of growth. These companies are now at a severe disadvantage to those that used the downturn to optimise their talent acquisitions functions. Put simply, they aren’t equipped to handle the urgency associated with the economic recovery. And because GDP is predicted to grow at such a fast pace this year, having access to talent is going to be absolutely critical.
Why thinking long-term pays off
Let me share a personal example. After 9/11, one of our now-clients took drastic action and cut a massive portion of its workforce. Profits increased as a result of eliminating expenses, but revenue stayed static for several years afterward. The organisation was in no position to grow as it had reduced headcount so much that it was operating with a skeleton staff.
In 2003, the company embarked on a recruitment drive. The leadership team wanted growth and they knew they had to recruit a sales team. The organisation partnered with us to hire the talent it needed to grow and hit its targets.
Then, in 2008, the financial crisis hit. Instead of reducing headcount as it did previously, it used the slow periods to upskill its workforce and optimise its talent acquisition function. As a result, revenue continued to grow, unlike at its competitors. And a loyal workforce was already in place when the economy lifted and business increased.
That company was not the only one that continued to hire throughout the financial crisis in 2008. Businesses that invested in talent gained an advantage over their competitors. They didn’t have to scramble to make hires and were ready to hit the ground running when the economy lifted. And because talent pools were abundant, employees brought on were better fits. Talent was already in place to propel those companies forward.
So, what are your options if you need to scale?
There are several options available to companies that need to scale at speed. The first, and most obvious, is to bring back employees who were furloughed. Of course, not all organisations had the luxury of being able to furlough staff, but for those that did, bringing back those employees will help as they already have the skills required to perform in their previous roles.
For those companies that had to make permanent cuts and need to increase their headcounts at speed, there are a few solutions. One is to “borrow talent.” In other words, bring contractors in. It allows access to skills quickly. If your company has employees based in the UK though, remember to factor in IR35. The reforms came into force this April (2021) after being postponed last year during the pandemic.
Launching a recruitment drive is, of course, another option. Perhaps the most obvious, but this takes time. And you need an effective talent acquisition function in place to do this (something some organisations don’t have right now after drastically reducing headcount during the pandemic).
Mobilising talent internally and adjusting roles and responsibilities is another option worth considering This allows companies to better utilise resources. It’s worth noting, internal mobility programmes are standard practice in companies that take a long-term approach to talent acquisition. Just another reason why looking through a strategic and proactive talent acquisition lens is so important.
Shifts in sourcing
Skill shortages remain a significant challenge in many industries including tech, manufacturing and healthcare. Before the pandemic hit, many executives said the most critical area of talent investment was the re-skilling of the workforce to keep up with change. In fact, investment in defining future workforce needs, upskilling and reskilling, reinventing sustainability and embedding diversity, equity, inclusion and belonging (DEIB) insights are now being prioritised by many organisations.
There has also been a shift in the way certain segments of talent are sourced and engaged. Previously, lower-skilled, blue-collar recruitment was fulfilled by focusing on attracting enough candidates to fill the funnel, then managing that volume through the hiring process. However, because of the high level of demand, even high-volume roles now require more skilled sourcing methods to find and engage the right talent.
And multiple job offers are the norm for today’s candidates. They are ghosting recruiters because they’re juggling so many offers. And this is causing bottlenecks in the hiring process. Ghosting isn’t a new phenomenon, but people are now more carefully thinking about what they value in a role and how they’re treated by employers. Thinking about what’s most important to candidates, then updating employee value propositions (EVPs) accordingly – and genuinely – can help.
Consider a talent acquisition partner
Talent acquisition touches all aspects of a business and is about looking to the future and strategically planning so that organisations have the right employees to meet their goals and hit their targets. A talent acquisition partnership can transform a business. This is because it can offer value on the things that many internal talent acquisition teams struggle to invest in, such as technology research and expertise, scalability of resources, and data and analytics. Talent partners also ensure employment legislation is adhered to – something that’s essential for global companies that deal with legislation in multiple countries. Maybe top of mind for most right now is how a talent acquisition partner can assist with the development of talent pipelines so companies can access wider talent pools and source elusive candidates.
Hiring during times of uncertainty
Find out why outsourcing talent is useful both in times of economic uncertainty and during periods of economic growth. Read more here.
Rebuild your talent acquisition infrastructure
The forecasted pace of the recovery means that you can’t afford to sit back. If you don’t have a robust talent infrastructure in place, start building it. Think about the long-term, not just the here and now. This will set you up not just for the recovery, but beyond.
This blog post was first published here.