Throughout history, economic hardships (like Covid 19) have created windows in which exceptional employees and leaders are widely available for a small window in time. During the late 1940s, many companies were struggling. At Hewlett Packard, business was slow and finances strained. But as multitudes of great engineers came out from of closing U.S. military labs, HP’s legendary founders Bill Hewlett and Dave Packard figured out that they couldn’t let such amazing talents pass them by. When asked how they could afford to keep taking on new people in those difficult years, their answer was simple: “How could we afford NOT to!” Years later, when asked about their unrivalled success they routinely said that their willingness to invest in talent no matter the external economic climate was quintessential.
Harvard Business School’s Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen considered the benefits of this kind of long-term thinking in an analysis of 4,700 companies across the last three recessions. They discovered that 9% were able to come out in much better positions than they entered because of their “progressive” focus. They did cut back but were extremely selective about when and where they did so and, more importantly, they continued to make strategic investments.
Rather than thinking you’re either hiring or you’re downsizing, they ‘copied’ the HP approach after the war, understanding they could do both things if they were smart about it.
Unfortunately, most organizations make the mistake of uniformly freezing hiring in downturns. During the 2008 global financial crisis, BCG and the European Association for People Management surveyed 3,400 executives, including 90 senior human resources leaders in more than 30 countries, to see how they were responding. The most frequent action was to scale back recruiting. At the same time, survey participants rated the selective hiring of high-performing employees from competitors as one of the three most effective responses to the crisis and the one with the best impact on employee commitment. This irrationality is widespread. Those who stay rational can exploit it. The ability to attract better quality employees more than ever depends on the reputation of the organization, the treatment of employees, the capacity for employees to grow or learn new skills, and the overall friendliness of your staff and management team. (Of course, salary and benefits are important, too.) Amid all the pandemic-related distractions and disruptions, attracting and retaining employees is a much more difficult task.
However, it also presents an opportunity to be creative and appeal to candidates that can help you now and in the future as the economic effects of the pandemic subside.