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Intro to the Recession / Recruiting Cycle

I’m a career recruiter. I’ll hit my 10-year anniversary in the industry tomorrow, on July 6th.

I love it. During that time, I’ve helped hundreds of job seekers gain employment in the sports world and now help IT professionals do the same in their industry.

With that stated, by necessity I pay special attention to macro hiring cycles to maximize my career growth and earning potential. Every 7-10 years, a recession occurs in the US. When that happens, the recruiting industry retracts by 50-90% — when the bubble bursts there are too many recruiters and not enough jobs to fill. People simply can’t make a living. 9/11 and the Great Recession are the two most recent historical examples.

Here’s what I fear is coming

Back in 2006, I watched as an increasing percentage of companies started slowing down their decision-making processes while pushing to hire more full-time / perm workers vs. contractors. Two 10+ year recruiting veterans I worked with at the time warned me this was reminding them of the pre-911 / Internet Bubble Days. I was confused. Why would companies be hiring full-time people more aggressively if a recession was coming? It didn’t make sense.

Here’s the reasoning: Public companies are fiscally responsible to their shareholders. Quarterly results matter above all else. As a bubble heads towards a bust, hiring managers find it is harder and harder to hire specialized talent; most people are employed since the bubble is inflated. As a result, the competitive market forces these organizations to hire qualified people directly into full-time roles or convert their top contractors into full-time permanent roles due to lack of supply. This is a precursor to what happens next.

Real World Events Affect Corporate Strategy

After 9/11, everybody became instantly fearful about the future. Business retracted. Mass layoffs occurred.

After the Great Recession, the world economy nearly imploded. Business retracted. Mass layoffs occurred

This next statement is in no way political:

Today, we have a Presidential Election that is forcing highly-conservative business leaders to choose between a Democrat or a Wild Card. When in doubt, a person usually defaults to their core behaviors. In other words, conservative business leaders are very likely to choose very conservative business policies for the next 12-18 months (…or longer depending on the recovery) to ‘wait and figure out what this means for them’ – a rational thought process designed to preserve wealth / survive / weather the storm.

What does this mean for you and me? I’m seeing signs the recession has already started.

For instance…

I personally recruited for a major project in Houston, TX the last few weeks – six openings (UPDATE – we’ve filled all six roles). Over the last few weeks, I communicated with over 100 people. Their stories inspired this post. I was surprised by the poor job market being experienced by IT professionals and recent IT graduates alike.

What caused the sudden lack of jobs? The fall in global energy prices caused a sudden shedding of IT and admin jobs in Houston by large companies forced to cut costs.

And it isn’t just Houston. The tech sector in the Bay Area is taking a beating as well. Retail is getting crushed. The Kansas economy and general economy aren’t better either. Here’s a historical list of recessions in the United States. It’s gotten the attention of everyone, including Mark Cuban, who are concerned about the “unicorn economy.”

Unfortunately, I can continue with recent examples…

I’m writing this because I want to be wrong. I don’t want to watch people I love, respect, and trust struggle through financial stress and the mental rigors of unemployment.

Please share your reactions and viewpoints as comments. If you can prove me right or wrong with examples and sound, logical reasoning, please do. I’ll read every comment. I am an information junkie and I love learning. Thank you for reading. And thank you in advance for your contributions to this conversation.

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