Are we in a recession or not? All the traditional indicators are there for a recession. We’ve had two quarters of declining GDP in 2022. Inflation is up. Interest rates are up. Housing starts are down, as is consumer confidence. It all adds up to a textbook recession.
On the other hand, unemployment is low, wages have escalated, GDP grew slightly in the last quarter and corporate profits are through the roof. How can staffing companies prepare for 2023 when economic indicators are all over the map?
The best solution is to plan for the worst and hope for the best.
That’s a tall order when you don’t know what’s to come. But if you lay the groundwork now, you will be better equipped you are to make tough decisions or capitalize on opportunities when the time comes. It’s like preparing your home for the unexpected. Stocking up on water, canned goods and batteries doesn’t mean you’re panicking; it frees you to go about your day with confidence. These tips will help you do the same with your staffing business.
Cut non-essential costs. Examine your current expenses to trim the fat. Look for recurring costs, like subscriptions you no longer use. Maximize the productivity of your team. Ask them to be part of the solution as well. They may have ideas for reducing expenses.
Find alternatives to hiring. Adding headcount may not be in the cards right now, but you must still deliver. Consider other options such as automation, offshoring or outsourcing instead. You can even cross-train internal employees, which helps to build their skills.
Optimize processes. Look at your operations to determine if you are making the most of your resources. Is there waste that interferes with productivity? Are you operating “the way things have always been done” rather than exploring efficiencies that can free time to spend on driving revenue?
Leverage technology. Are you making the most of your current technologies and exploring new ones? If you’re getting the bare minimum from your ATS or CRM, take another look at the features available. Is now the time to explore automation or AI to do more with less? An investment of time and money now can save you when unprepared competitors are struggling.
Increase your marketing spend. Spending more may seem counterintuitive, but if you go dark when times are tough, it looks like you’re out of business or struggling. Focus on marketing to drive sales — right now is an ideal time to diversify your client base so you have less client concentration and industry risk. It’s also an ideal time demand more ROI from your job advertising by using tools like programmatic job spend management to make your ad dollars go further.
Don’t slash prices. Replace the word “discount” in your mind with “devalue.” When money is tight and clients are scarce, the temptation to cut your prices is real. But what you’re saying to potential customers is, “Just kidding, my services aren’t worth what I told you they were.” And what does it tell existing customers? That they’ve overpaid?
Recruit top talent. When the economy is strong, anyone can sell. They are just taking orders. If you stand on a corner in a snowstorm holding a bunch of shovels, it will take no skill to sell them all fast. Stand on that same corner when it’s ninety degrees, and it will take exceptional talent to sell those same shovels. You can’t afford to bring on a candidate who just checks the “must-have” boxes.
Upskill your team. Elevate internal staff past the order-taker stage by retraining them on how to sell the strategic value of staffing and recruiting. Show them how your services help employers to control costs, drive productivity, mitigate risk and manage uncertainty. And be sure they are comfortable with multiple communication channels — effective calls, engaging emails and texts that pack a punch if you use them.
Choose not to participate in a recession. In any economic downturn, some businesses fail, some survive and some thrive. Always remember why you are in business, and don’t lose sight of your goals and mission. Use these tips to be prepared, whether a recession becomes a reality or not.
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