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The upsides of the downturn
for corporate recruiting

Today’s economic landscape and changes in the workforce require fresh approaches to strategic talent acquisition in 2009.

As we near the end of the year, job losses continue at a stunning rate. According to the most recently available unemployment data from the Bureau of Labor Statistics, U.S. unemployment rose to 6.5 percent in October, with the number of unemployed increasing by more than 600,000. Harrowing, to say the least. When the Bureau issues November unemployment numbers this month, the outlook is not expected to improve.

Experienced recruiters have come to expect dramatic up and down cycles in corporate talent acquisition. Just as predictable as these cycles are the reactions of many corporate managers and CFOs -- freezes on hiring, pay increases, budgets and promotions -- all actions that can have long-lasting, negative impacts on organizations as the economy recovers.

According to Dr. John Sullivan, well-known HR thought-leader and professor of management at San Francisco State University, these poorly thought through downturn freezes can have the effect of:

Increasing vacancy rates in revenue producing roles that actually decrease revenues beyond any cost savings

Driving increases in employee burnout and turnover

Hindering the organization’s ability to hire superstar talent as it becomes available

Decreasing an organization’s ability to innovate

Damaging the employer brand, making hiring more difficult when the economy improves

A Different Approach

At this year’s ERE Expo East Dr. Sullivan gave a presentation that detailed the steps corporate recruiting can take to ameliorate the negative effects of historic, reactive responses to challenging economic conditions. He suggested a radically different approach, which includes taking a more strategic approach to recruiting and actively taking advantage of the opportunities presented in tough times. Sullivan’s “advantages of an economic downturn for corporate recruiting” are:

Your organization has less competition from other firms. Because of reduced recruiting budgets and the loss of top recruiters, candidates will be easier to sell. They have fewer options and fewer counter-offers to choose from. Simply put, great people are easier to get.

More high quality candidates are available. High quality, recently released people are on the market. There is also less loyalty among “layoff survivors” due to compensation cuts, mergers and other factors.

Employment brands are weakened. Weakened employment brands are ripe for culling best-quality employees. Highly publicized layoffs and mergers at former “powerhouse” employment brands like Yahoo, Citigroup and Merrill Lynch are good examples. This provides a terrific opportunity for organizations that are strategically maintaining or growing their employment brand.

Turnover and retirement rates decrease. Downturns have the effect of increasing employees’ desire for job security. This means that there will be lower turnover among new hires and fewer retirements going forward due to drastic reductions in the value of 401(k)s.

Higher quality recruiters are available. Very skilled recruiters are available to those firms smart enough to plan long-term HR strategies.

New technologies are available. Social networking, Google search, niche career sites like CPGjoblist, and other web-based technologies make effective recruiting possible with much smaller budgets.

There is an opportunity to “explode out of the box” when the economy upswings. A well-prepared firm is better positioned and possesses a real strategic advantage when the downturn is over, and puts you ahead of other firms that decimated their recruiting capabilities during more difficult times.

Tight times make for stronger recruiting organizations. This is the time to focus on metrics and return on recruiting dollars. By eliminating deadwood, streamlining processes and focusing on approaches that work, you strengthen the HR function overall.
Workforce planning will be encouraged. It’s normally tough to convince executives to invest the time in workforce planning, however the pain of layoffs can go a long way in convincing senior management of the importance of a strong workforce planning function. This is the opportunity to develop effective forecasting capabilities and a flexible recruiting strategy that can easily shift through economic cycles.

Dr. Sullivan stated in a separate article published on ere.net earlier in October, that “the majority of wealth in modern civilizations is more often than not created during times of significant economic crisis. Now is the time for talent management to step up and proactively re-engineer antiquated practices and programs, and to embed talent management activities throughout core business processes while the organization can accommodate change. If you wait until things are moving fast once again, you won’t have any time to be strategic -- you’ll be too busy catching up!” This “advantage” thinking can be really helpful in terms of planning tactics for navigating through economic waters over the next 18 months.

What To Do Now

What will leading recruiting industry professionals be doing in the coming months? According to Sullivan, hot recruiting trends include:

Upgrades to employment branding. Key areas for focus include increasing media coverage and visibility online, building a “green” brand, and countering your negative employment brand, including improving the on-boarding process and the interaction with 98 percent of applicants that do not get hired.

Reinvigoration of referral programs. The highest volume of candidates comes from well-designed employee referral programs. At CPGjobs, we have known this for years and actively work our candidates’ personal networks on our clients’ behalf. Internally in top organizations, the focus will be on approaching key current employees for their referral networks, leveraging non-employee referrals, coupling meaningful rewards with internal referral programs and helping employees leverage their social media relationships.

Renewing a quality focus. Recruiting leadership in the coming months will refocus on identifying key factors that increase the quality or on-the-job performance of new hires. Areas to focus on are improved quality of hire metrics, calculating the differential between average and quality hires and identifying sources that produce the highest quality candidates.

Reinforcing the business case for recruiting. Leading talent organizations are taking the opportunity to reposition themselves as non-transactional organizations, demonstrating to executive management the importance of recruiting even in times of reduced hiring volume. The key focus here includes predictive modeling, dollarizing recruiting results and demonstrating the dollar impact of vacancies in revenue generating positions.
Hiring innovators. Product copying and the high visibility of innovative firms like Google and Apple are forcing recruiters to modify processes in order to successfully hire innovators and game changers. Key focus areas include relationship recruiting, pre-need hiring and tolerant/inclusive screening and interviewing processes.

Permanent Workforce Changes

What of changes within the workforce itself? Highly skilled, educated and experienced candidates will, have an edge in employment going forward. Kevin Wheeler, president and founder of Global Resources, Inc., a global human capital and acquisition firm, predicts that candidates will become increasingly unwilling to work under conditions as usual.

“Candidates have access to unparalleled information about prospective employers through the Internet and its many sources. Reliance on a single firm for security has already eroded, and the recession will strengthen employees’ wariness about promises and deferred compensation. More top employees will seek employment contracts that include clauses that spell out layoff pay and benefits.”

Candidates are also likely to try free agency in numbers greater than ever before. Many will try to work on their own rather than go back under the insecurity of a corporate umbrella. Wheeler says that recruiters and HR staff will have to accommodate these free agents and modify internal regulations to make the use of contractors legal and IRS compliant. “It may be necessary to lease employees, employ contractors in greater numbers and learn to share talent between organizations.”

Wheeler maintains that “employees, to a growing degree, are seeking employment with companies that hold high values and keep commitments to employees and their families. Recruiters must understand the core values of the companies they work for and find better ways to teach those values internally. Employees increasingly focus more on what is done, rather than on what is said. The emerging candidate pool focuses on actions almost entirely.”

Finally, according to Wheeler, “Employees now want to work where they want. The Internet has made it possible for most service and knowledge employees to be located away from the physical center of their company. Recruiters will need to encourage flexible work arrangements and lobby with hiring managers to make these arrangements normal.”

Not Just “Filling Positions”

Recruiting is likely to become even more challenging in 2009, but now is not the time to scale down human resource budgets and hiring. The economic downturn is providing us a pool of exceptionally talented candidates recently cut loose from un-enlightened organizations. Proactive, adaptable, technically savvy recruiters who are open to industry shifts and emerging changes in work trends are likely to come out winners as we move through and emerge from the current economic downturn. Bottom line? If you think of your job as “just filling open positions,” now might be the right time to consider a different approach.

A Special Message

I want to extend a sincere word of thanks to all our CPGjoblist clients who have given us their business and trust in 2008. Have a safe and happy holiday season; we look forward to working with you in the coming year!

--Michael Carrillo, President and Founder, CPGjobs and CPGjoblist.

Michael Carrillo is president of CPGjobs, the CPG industry’s leading candidate recruiting service for employers and recruiting agencies. You may contact him at Michael@CPGjobs.com or call (626) 535-0143.

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WELCOME ABOARD! CPGjobs welcomes its newest clients: Crown Imports, Impulse Marketing Company, Seventh Generation, Inc., Silhouette Optical, Ocean Spray and Snack Alliance. For the complete roster of more than 100 leading CPG companies represented by CPGjobs visit our website.

YOU’RE HIRED! Congratulations to the following CPGjobs clients and their new executives: Steve Popp hired by Gerber Legendary Blades and Pamela Wesson hired by Newell Rubbermaid. If you’re looking for a candidate -- or a job -- contact CPGjobs at 626-535-0143.

GOOD FRIDAY, WEAK MONTH: Strong discounts brought U.S. consumers to stores on Black Friday -- the traditional first day of the holiday shopping season -- with estimated sales rising 3 percent from last year, according to ShopperTrak RCT Corp. The firm reported that preliminary sales for Black Friday totaled $10.6 billion. This year's Black Friday sales increase is lower than the 8 percent jump seen last year, but it comes in a time of economic uncertainty and declining consumer confidence. Despite the modest increase, overall retail sales for November look weak, the Wall Street Journal reported. November sales of apparel, luxury goods and electronics plunged below year-ago levels, according to new data from MasterCard SpendingPulse. Some chains could post double-digit drops for the four weeks ended Saturday, MarketWatch said. Sales fell 20 percent from year-ago levels at apparel and department stores, 24 percent at luxury stores and 25 percent at electronics stores, according to reports. In the apparel category, sales of women's wear were weakest, falling 18 percent, while menswear dropped 16 percent and footwear fell 14 percent. SpendingPulse, which tracks spending on credit cards as well as cash and checks, hadn't yet tallied the overall number for November. It also didn't break out spending at discounters such as Wal-Mart Stores Inc., which sells food and other necessities and has outperformed competitors in recent months.

MARK YOUR CALENDARS: For the FMI Midwinter Executive Conference, January 11-13 in Orlando; the Philadelphia National Candy, Gift & Gourmet Show, January 11-13 in Atlantic City, N.J.; Hobby Industry Show, January 25-28 in Anaheim, Calif.; IFDA Partners Executive Forum, January 25-28 in Amelia Island, Fla.; the European Fine Food Trade Fair, January 26-28, 2009 in Maastricht, Netherlands; North American Association of Food Equipment Manufacturers, February 5-7 in Orlando; and the International Home and Housewares Show, March 22-24 in Chicago. For more events see CPGjobs online Calendar.

ON THE MOVE: PepsiCo CEO Indra Nooyi has been named one of America's best leaders by U.S. News & World Report. Nooyi, who was born in India and earned an MBA from Yale, joined PepsiCo as its chief strategist in 1994....Campbell Soup Company has named Sean Connolly president of Campbell Soup USA and Irene Chang Britt president of North America food service operations. Connolly will manage the company's U.S. soup, sauces and beverages business, while Britt will succeed him as president of Campbell's North America food service unit....In a separate move, Campbell's appointed Keith Olscamp vice president of business development and industry relations. Olscamp will report to Archbold van Beuren, who is president of global sales and the firm's chief customer officer....It's official: InBev closed its purchase of Anheuser-Busch Companies Inc. to create the world's largest brewer in the biggest cash acquisition in history. The maker of Stella Artois and Beck's will be known as Anheuser-Busch InBev. The combined company will brew about a quarter of the world's beer and generate about $36 billion in annual sales, helping it reclaim its position as the world's top brewer from SABMiller....Send your company news to editor@CPGjoblist.com

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