With an economic recession on the horizon, many companies are faced with a Talent Dilemma:
“Do we tighten things up & downsize our workforce, or do we attempt to grow by acquiring Top Talent (that is being let go by other companies)?”
Based on almost a half century of experience and research, SMG has the unique advantage of being able to track hiring trends across many economic ups and downs. Our data clearly shows that companies who take advantage of economic volatility (“the buyers”) end up coming out of these down turns in a far better position than when they entered. This is due to the significant ROI associated with having Top Talent. As evidenced in our previous blog, Top Producers generate 5 to 7 times more revenue for an organization with only 1/5 to 1/7 the expenses.
WHEN THE GOING GETS TOUGH THE TOUGH GET GOING
Our research demonstrates that talent can survive in buoyant markets but in recessionary times the performance gap between top talent and average talent increases exponentially. Due to their strong self management capabilities, top producers are relatively unaffected by external factors like the economy. These individuals mainly rely on internal factors to drive their success, which is why they seem to excel even further during down markets. Consequently, the ROI associated with hiring Top Talent is heightened during recessionary periods, and it reaches even further heights when the market conditions correct positively.
NOW IS THE TIME TO ACQUIRE TOP TALENT
With the talent void created by COVID, the current talent landscape is ripe for companies to take advantage. With large companies trimming their workforces to appease shareholders, now is the time for more strategic organizations to take advantage and bring on new talent that fits within their culture.
HIRE AND DOWNSIZE BASED ON POTENTIAL
A consistent finding of our research is that “Past Performance Predicts Future Performance”, providing nothing changes. Unfortunately, the only constraint is change and recessionary markets are in fact a major change. Once again, self managers are characteristically resilient and find change a “challenge” rather than a “hurdle”. As a comparative analogy, we often see that when a top athlete is traded to another sports team; the team improves substantially. In other words, the top athlete elevates the overall performance of the team. However, we have also seen the opposite happen where a top athlete is traded, and the performance of the top athlete is now brought down by the existing team. It is not only essential to keep your Top Talent in recessionary times, but it is equally important not to inherit another organizations performance problems.
You cannot afford to make a bad hire during recessionary times!
ARE YOU REBUILDING OR GOING FOR THE CHAMPIONSHIP?
Continuing with the previous sports analogy, some teams are currently selling their Top Talent; clearing high salaries & choosing to rebuild whereas other teams are buying top talent and “going for the championship”. This is an important recruiting decision for all organizations. If your organization is in the position of being a “seller” and choosing to downsize, we highly recommend using one of our POP™ assessment tools to do a TALENT AUDIT to ensure you are letting the RIGHT people go. The ROI associated with hiring and keeping Top Performers, and the consequences & costs associated with low quality talent, are the topics of two latest blogs. Check them out by clicking on the links below.