Forget the Economy. Hire Now
Instead of waiting until the economy strengthens further, employers should fill positions new and old now, before the talent war reignites. Pro or con?
Pro: Hesitate at Your Own Risk
Finally, there’s real evidence the recovery is gaining momentum: 192,000 new jobs were added to payrolls in February. Yet many companies still feel skittish about hiring. Be warned: It’s not a buyers’ market for employers in many sectors.
Such industries as technology and health care are accustomed to competing for scarce talent—even throughout the downturn. The technology sector has seen fierce competition for talent with employee poaching, outsized compensation, packages, and retention battles. This trend will grow only more widespread. By 2015, 60 percent of newly created jobs will require skills held by only 20 percent of the population, according to the American Society for Training and Development.
And the severity of the recession only exacerbates this shortage. The downturn shocked everyone into a new reality: that no job is really safe. As a result, many Americans have kept their heads down at their current jobs but are keeping their eyes peeled for a better one. Jobvite’s nationwide survey, Job Seeker Nation, found that 53 percent of those employed feel open to a new job—and are doing more than just hoping for it. Instead of waiting for the economy to improve their prospects, they are developing their skills, building connections, and cultivating new job opportunities via outlets such as social networks.
Smart employers recognize this and are not sitting still. Companies are now more concerned about their hiring pipelines, because they can’t count on a ready supply of applicants. "The economic recovery means we have to build relationships with a pool of promising talent because we no longer have that quick turnaround in the hiring cycle," says Sarah Widner, who heads up human resources for Total Attorneys, a Chicago firm that delivers professional services to law practices.
Hiring tends to lag even during an economic recovery. But if you wait too long to build your hiring pipeline, your business performance may be what’s lagging.
Con: Keep Your Wallet in Your Pocket
As the managing director of a business brokerage firm in Chicago, I, along with my brokers, have the opportunity to review the financials of hundreds of small to midsize businesses every year.
Over the past six months, small business revenues have stabilized and cash flows are strengthening. Yet most small businesses have a very long way to go before they recover the significant ground they’ve lost in recent years.
The owners of these businesses are still making a fraction of what they once earned. To these owners, the very idea of hiring talent for talent’s sake is simply absurd.
Technology, banking, and multinational companies are sitting on record levels of cash. They may have the luxury of gearing up staffing levels for anticipated future revenue and profit growth. But that is a luxury most companies cannot afford.
I am optimistic about the future. My business is booming. Cash is coming off the sidelines to buy all types of small businesses. I’m glad that people are making investments again. Yet I urge caution.
We Americans spent the better part of the past decade buying homes we could not afford and racking up credit-card debts we would never repay. Collectively, we were betting on an ever-strengthening economy. We were wrong.
Does it make sense to suggest that we hire people we do not need? Do we really want to make the same bet all over again? Do we ignore rising health-care and fuel prices?
A wise man once told me that having common sense is anything but common. For average business owners, hiring great people they cannot afford just because they are available defies common sense.