2023 saw a drastic increase in layoffs in the IT domain. As we step into 2024, news about Citigroup laying off over 20,000 of its employees has forced us to presume if this layoff trend is going to spread across industries this year. All the while global recession lingers in the background. With a large number of talents stranded, this is the best opportunity for recruiters to turn this into an opportunity to attract top talents.
If approached strategically, recruiters can identify & attract top talents during layoffs. So, what’s the secret sauce? Let’s dig deep and discover.
5 Reasons for a Layoff
Cost Cuts
When a company is forced to cut costs due to either a lack of profits or increased expenses, fixed costs come first on the list. One of the primary fixed costs that any company has to bear is employee salaries. Hence, cost-cutting is a glaring reason for layoffs.
Decrease in Projects/Work
As workload increases and the company expands, it hires employees to accelerate outputs. The same is true for the opposite i.e. when the company begins to decline and loses clients, they seize to see the need for extra hands. No work for employees and their centralized expertise in a single domain accounts for layoffs in this scenario.
Rise of Automation
Automation has brought new types of jobs but has also been among the primary reasons for layoffs. Whether it’s the surge in the use of robots for car manufacturing in the 20th century or the more recent integration of artificial intelligence tools in day-to-day work, whenever a new technology has come, jobs have been lost.
Loss of Funds
A well-funded company with a focus on expansion hires in multiple domains. But, at the end of the year when the balance sheets are covered in red or if the investors pull the plug, they look to reduce their expenses and are forced to layoff employees.
Mergers/Buyouts
When two companies merge or one company buys another out, layoffs become inevitable. After all, the job roles of two companies have to be reduced to one. The situation turns into a game of musical chairs, the last one sitting wins the position.
What’s the Role of a Recruiter During Layoffs
Layoffs are disheartening. Not every employee takes it with a brave heart and internal recruiters here play a crucial role in motivating and pushing the employees to come out of the discouragement and look the other side. This is a good time for hiring managers to interact with the employees. Rather than making exit interviews about the company, it should be about the employee. It’s better to avoid questions that might make the leaving experience more stressful for employees. However, if it’s a compulsion, try to put it across in a subtle manner. Some recruiters also use their network to refer employees to other companies.
If it’s the other way around and you are to recruit someone who has been laid off, it isn't optimal to constantly mention it during the interview. Rather than using the layoff as an excuse to investigate the background of the employee, focus on the question - does he have the skills required to furnish this job role?
How to Identify & Attract Top Talents During Layoffs?
When times are tough and growth seems to take a sharp dip, layoffs look like an inevitable option for companies to cut costs. But uncertainties like these are only temporary and the sun might shine brighter tomorrow for the same organizations. Similarly, employees also choose to resign if they are ill-treated, faced with bias, or exposed to a toxic work culture. This is the time for recruiters in growing companies to aim to build a pool of talent. So, how do you attract top talents?
Look Beyond Money
It’s quite possible that the talents you eye have already moved beyond the stage where money attracts them the most. They are experienced and know their worth. So, it’s pointless to pull them with a hefty cheque (unless you are ready to go all out and the candidate is extremely money-minded). Instead, showing them the company culture and explaining to them how the company will add value to their professional life and in turn how you believe they are the best fit for the role is necessary. Coming from layoffs, it’s also important to make them feel secure and included in the workforce. This gives the talent more reasons to choose you over the other employers.
Remember, if the candidate fits the bill, being open about the company's past, present, and the scope of future builds trust. It allows the candidate to feel involved and part of the team already,
Act Fast
The top candidates are never in the market, or if they are, it’s for less than 10 days. That being said, it takes an average of 27 days to make a hire for a job role. So, for you to grab the best talents, you have to be quick, quicker than everyone. You should be the first to reach the candidates. And you can do it how? Getting the most laborious task of sourcing out of your way.
Using AI-driven tools like Skima AI you can employ your existing candidate database to quickly identify the best fit for your open position. Once perfect candidates are matched with the right jobs, you can reach them faster, and with more confidence.
Use Your Network
Layoffs push both recruiters and job seekers to approach their network. Where on the one hand, recruiters can refer potential candidates in their network, and job seekers who are open to work instantly come to the notice of hiring partners at companies. Seeking recruiters can also reach the executives of companies that recently went through a layoff to ask for recommendations. Top talents, in general, have a good rapport with management. So, there is a high probability for recruiters to get the right recommendations.
Choose The Right Candidate
The top isn’t always right. You must seek to attract top talents but also consider if they are the right fit for the organization. Companies' short-term goals change periodically. So, a candidate who must have been an excellent fit a few years back, might not be today. Thus being laid off. However, as a recruiter seeking potential employees, the same candidate can be an exact match for your organization.
AI recruiting tools like Skima AI use artificial intelligence and machine learning models to optimally identify candidates that best suit a company’s goals. Knowing whether a candidate is the right fit before making the first move puts you in a better position in negotiating and closing.
How Does Recession Affect Layoffs?
An economic slowdown and an increase in inflation indicate a recession. As industry work depletes, demand decreases, prices sour, and companies begin to make less and less in profits. Some, even go in a downward spiral of losses. In order to cover their losses companies lay off employees. The layoffs happen on a mass scale to generally save time and show some profits in the next quarter.
Layoffs open doors for both job seekers and recruiters. When the opportunity strikes, how you act makes all the difference between you building a pool of talented employees right for the company or loosing them. Leverage recruiting software like Skima AI and ATS tools to accelerate the hiring process and close jobs, faster.
