Impact of challenging economic times on hiring and retaining talent

Recessions, cost of living crises, credit crunches, financial downturns, economic volatilities, and slowdowns are challenging for any organisation and its employees. However painful they can be, the underlining fact is that they are temporary situations within a marketplace and therefore require a short to medium term strategy to successfully navigate through them. Specialist skills and proven experience will help to see businesses survive and thrive. Hiring and retaining talent during these times is therefore a key priority.  

Despite current economic concerns, recent ONS data shows that the number of vacancies in October to December 2022 was 1,161,000. These remain at historically high levels and although the redundancy rate has increased to 3.4 per thousand employees in September to November 2022, this still remains low.

“The demand for talent remains strong” said Taryn Wilkinson of executive and management recruiters, Walmsley Wilkinson.

“However, as we’ve previously experienced during recessionary times, the current economic backdrop will certainly impact on recruitment - one of the best ways to secure your business is to hire and retain the best people.

“It’s a myth this can become easier if more candidates become available due to redundancies elsewhere. Identifying the true talent is key, those with highly specialist skill sets will always be in demand. Encouraging and supporting risk averse individuals that are in employment, to make a career move during uncertain times is a tough ask. Despite the offer of a career enhancing opportunity with excellent financial rewards, candidates will still need to be convinced of the long term stability and security of the employer.

“Yet that doesn’t mean that retaining employees will be easy. Previously loyal individuals may be experiencing the financial pressures of the cost of living crisis and feel the need to seek an alternative role elsewhere with a higher salary offering. It is often the case that those with long tenure are penalised for their stability. Their salaries can lag below market rates and those of former colleagues who have moved companies more frequently.

“Organisations are experiencing increased costs across many areas and therefore supporting employees further financially does need to be viable. However doing so will help to retain talent for the long-term and assist in achieving the best operational results during demanding times.”

According to the CIPD’s latest Labour Market Outlook report, which surveyed over 2,000 senior HR professionals and decision-makers in the UK, the expected median basic pay increase has risen to 4% overall and as much as 5% in the private sector. These are the largest pay increases recorded by the CIPD since it started tracking this in 2012. However, with inflation already hitting 10.1%, it will feel like a pay cut to most workers. In response, the CIPD is calling on employers to look at other means beyond pay to support employee financial wellbeing and improve job quality in the current cost-of-living crisis.

Taryn Wilkinson continues: “Recruiters often talk about client-driven or candidate-driven recruitment marketplaces during periods of economic expansion and contraction, arguing that the balance of power and increased needs / expectations shifts from one to the other. There is some merit in this description, but nevertheless the ability to hire and retain talent does not become any easier.

“Regardless of any economic climate, it requires effective continuous talent acquisition and retention strategies including planning, processes, engagement, identification and decision making. This needs to be achieved in an agile way supported by experienced and proven recruitment business partners.”

Walmsley Wilkinson based in Lancashire's Ribble Valley, owned by two partners, Linda Walmsley and Taryn Wilkinson, offers professional solutions for executive and management recruitment needs. They support a variety of organisations, including large corporations, family-owned entities, private equity and the third sector to identify and secure the best leadership talent, across the UK and internationally.