Ways the Recession Could Affect Employee Hiring

employee hiring

Top talent is elusive regardless of the economic situation. It’s even harder in a recession when the market is taking a dive. A recession is a severe drop in economic activity, usually lasting for several months. Ordinarily, recessions manifest in wholesale-retail selling, real GDP, industrial output, real income, and employment rates. Because labor is a major economic input, financial turbulence will trigger an employment and output drop. Here’s what happens to employee hiring during a recession.

Many Job Applications

Although most employees expect salaries to drop in a recession, they still apply for jobs. 

Many applications would mean a variety of talent to choose from, but it also overwhelms your HR team. Fortunately, there are several ways to manage the flood of candidates.

You can start by setting minimum qualifications to eliminate candidates during the initial stages. Another option is limiting applications by including a short deadline. That’s not to mention the use of screening tools to check résumés for qualifying criteria. 

More Contract Work

Several factors explain the rise of contract work during a recession. For starters, it allows companies to expand and downsize according to their staffing needs. Employee hiring is also faster since you only evaluate technical skills instead of cultural fit.

This means you don’t spend too much time screening or training candidates. Moreover, contracting is cheaper. Because you’re on a tight budget, contract work saves you costs like sick pay, medical benefits, and 401 (k) plans. 


Because of the delayed job growth, companies avoid employee hiring during a downturn and might even dismiss some staff. However, the best employees could still retain their jobs because they can handle pressure better than average workers. Furthermore, top performers aid economic recovery after a recession.

Note that staff dismissal could affect your company negatively. Although they slash immediate expenses, layoffs are costlier in the long run when you have to hire and train employees afresh. Your reputation is also at stake. Candidates will avoid your company if you constantly dismiss your workers. The remaining employees might even leave voluntarily, throwing you into a talent crisis. 

Conducting Successful Employee Hiring During Recessions

In addition to assessing your labor needs and empowering in-house workers, you can engage an employment service to secure top talent during a recession. A staffing agency understands the market demands during every economic situation and can staff your company from its wide talent pool. Do you want to stay ahead of the recession? We remain a reputable employee hiring partner; contact us with all your recruitment needs.

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