Impact of recession on hiring & training employees

No one needs an introduction to the word recession in these times. Though the Indian economy is still growing, organisations are taking all possible steps to ensure that they survive through these uncertain times of global recession. One such change has taken place in the recruitment and training departments of most organisations.

According to a recent survey conducted by the Boston Consulting Group, when organisations were asked about the steps they are taking to respond to this crisis, they got the following responses:

• Cutting back on recruitment (69 per cent)
• Cutting back on company events (54 per cent)
• Cutting back on bonuses linked to company performance (45 per cent)
• Laying off temp employees (43 per cent)
• Laying off regular employees (34 per cent)
• Cutting back on individual training (33 per cent)
• Cutting back on technical training (31 per cent)

If we look at this data, it is quite evident that out of the top seven measures being taken to control costs, five are related to the area of recruitment and training.

The adjacent table shows how the recruitment and training departments change their outlook when the times change from a high growth environment to an uncertain environment of recession.

Text: Amit Bansal. The author is the CEO of PurpleLeap (http://www.purpleleap.com/) an employability skill enhancement initiative of Educomp Solutions Pvt Ltd.

In times of recession, the demand-supply gap tilts in favor of the employer. So, there are more people available than what the market demands. Secondly, the overall risk appetite of the organisation reduces dramatically, thereby making the organisation resort to the safer options.

Thus, organisations tend to look for people who are a perfect fit for a role instead of looking at resources who are 'generally smart' but need a time of 3 to 4 months before they can start producing results.

The recruitment strategy and training strategy go hand in hand. Let us look at this part of the human resource management (adjacent table):

It is quite evident that organisations will cut down on training budgets to save costs in times of recession. However, businesses still need competent people who can deliver services to the customers.

Part of this responsibility is shifted to the recruitment team where they are mandated to find the 'right-fit' candidates who do not need long training cycles. Business teams, who provide 'project-specific' training to new members of the team, so that the overall training costs could be minimised, share part of the responsibility.

The implications of this shift are more severe for entry-level hires as most of the freshers do not possess the requisite technical and functional skills to start producing results from the day of joining.

So, what should the freshers do?

Upgrading skills

First and foremost, students need to invest in up-skilling themselves. Apart from upgrading problem solving, communication and technical skills, students need to make sure that they prepare for specific roles in the industry. It would be a good idea to target a particular role and attain technical and functional expertise for that role itself.

For instance, students wanting to make a career in software engineering should make sure that they know the relevant technology (say programming using Microsoft platform) and the processes and tools that they are supposed to work on in their first year of work-life.

Prepare for short-term assignments

Temping and contracting organisations provide skilled manpower to organisations on an assignment basis. If freshers do not get into regular full-time jobs, they should be prepared to work on a temporary or contract basis with such organisations.

Students can overcome the prevalence of this gloomy environment with an appropriate career plan. A levelheaded thinking about the realistic choices in the short-term will go a long way in laying the foundation for a life-long career.

Be it in terms of skill enhancement or targeting the right kind of companies, any choice that enhances an individual's professional value is bound to yield results over a period of time.