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Graduate Recruitment: Going into a Recession

March 2020

When the economy moves into recession, what happens? It differs by sector. Some, like government, major food retailers, utilities and non-discretionary consumables will see little impact.

But for many organisations there will be big changes. The initial response is to put a freeze on recruitment (followed by lay-offs), cancel consultants and travel and minimise capital spending to essential projects.

We saw this in the GFC in 2008. Back then, organisations regularly used recruitment agencies for general recruitment. With the freeze on recruitment, that function was brought in-house and assigned to HR as there weren’t many jobs to fill.

When the economy improved, organisations kept recruitment in-house, creating internal talent acquisition teams and using (back then) new technologies like Applicant Tracking Systems and LinkedIn Recruiter.

The GFC became a catalyst for change to processes and technologies. There will be a similar outcome as a result of Covid-19.

So what happens to graduate recruitment?

Employers are currently recruiting graduates to start employment in early 2021, nearly 12 months away. What will the economy look like by then? Probably very difficult. Will organisations still be bringing graduates on-board? For many the answer is yes, albeit maybe at much lower numbers. Other organisations will not be hiring. For sectors that aren’t impacted by the recession, they will continue to hire as usual.

 

There will likely be pressure to cut costs.
Graduate recruiters won't be immune from cost-cutting. We've already seen examples of headcount reduction in graduate recruitment teams. But it will spill over to management demands to reduce spending across marketing and assessments. The timing will be immediate - "we need to cut now". So recruiters should prepare a contingency plan.

 

Be prepared for ambiguity.
Organisations who are in the midst of marketing and receiving applications will continue the recruitment and assessment process. But be prepared for ambiguity. There may be changes to hiring numbers, cancellation of the program mid-stream or a delayed time frame to when offers are made. Open communication with candidates will be important.

 

Expect a big increase in the number of graduate applications.
For organisations who are about to start advertising or open applications in June or July, expect a big increase in the number of graduate applications.

Already on Whirlpool graduate forums students are sharing examples of consulting firms slashing hiring targets. They know the overall number of graduate jobs will shrink.

Students will hedge their bets, applying to a broader range of employers, including organisations they don’t really want.

 

In 2021 expect a higher rate of reneges.
What happens when the 2021 graduates are ready to start? Expect a higher rate of reneges. Given the uncertainty, it’s understandable that graduates, if they can, will accept multiple offers. There's enough history of employers rescinding graduate offers leaving candidates without a job when for the previous six months they had felt secure. 

To manage potential reneges, best practice is to identify a group of back-up candidates. But in doing so be up-front with them. Let them know that based on the current positions available, the organisation wouldn’t be able to hire them. But if circumstances change, they would definitely be considered. Candidate feedback from this approach has been positive.

 

What if you currently outsource and you’re asked to bring the recruitment process in-house?
That may happen. The biggest effort is initial screening and doing it manually isn’t going to be viable. Options are to screen via testing, video interview or GradSift.

Video interview is not really an initial screening tool. Who is going to watch a 1,000 plus videos?

On cost alone, GradSift is easily the best option. At around $5 to $7, it's one-third the cost of a psychometric test. That’s a significant saving.

 

Other ways to lower costs?
Many employers use cognitive testing for initial screening. Again, for employers under pressure to find savings, GradSift is a solution.

Thinking to the future, GradSift's Analytics can also show employers where to best spend limited marketing and campus budgets for next year.

 

Now is the time to trial a new assessment process.
Social distancing will change in-person interaction and assessments. Just as the GFC became a catalyst for change to general recruitment practices, here is an opportune time to try a new approach to assessments.