The Economy Is Scary. Recruiting Doesn’t Have To Be

Supporting employees in a period of economic turbulence

Despite stubbornly high inflation and other forms of economic volatility, companies have continued to hire at a rapid rate. This has given job-seekers an advantage over employers in the labor market and fueled rising wages, but has also been accompanied by higher inflation. Even as the labor market has proven to be remarkably resilient, however, higher interest rates, higher costs of living and rising household debt have created high levels of anxiety for those currently looking for work. 

While the labor market remains strong overall, job growth has slowed somewhat from the record high levels of 2022, and this is beginning to show up in candidate sentiment.  The 2023 Criteria Candidate Experience Report – which is based on a survey of more than 2,000 candidates around the world – found that 17 percent of job-seekers say they’ve been laid off over the past year. Forty-one percent of candidates say finding a job has become more difficult compared with last year, while just 12 percent say it has become easier.  

There are, however, still around two jobs for every candidate who is actively seeking work, and this has remained consistent since October 2021. This means recruiters are still locked in an intense competition for talent, and candidates are benefiting in the form of more options and better compensation. But HR teams shouldn’t ignore the strain many candidates are under (especially in certain industries, such as tech), and they need to account for economic instability and unpredictability in the year ahead. 

Candidates Face an Uncertain Economic Environment

A tight labor market benefits candidates in many ways – it gives them greater negotiating power, drives up wages, and offers a wider array of professional options. But this shouldn’t obscure the fact that candidates and employees have been through an extremely arduous and stressful few years. The COVID-19 pandemic led to mass job displacement, permanently changed how and where employees work, and continues to wreak economic havoc. 

While the personal savings rate spiked during the pandemic, it has since fallen well below pre-pandemic levels. Meanwhile, credit card debt in the U.S. has surged to $1 trillion – an all-time high, and a 17 percent increase from a year ago. As inflation remains high, employees are feeling the consequences – the proportion who say compensation isn’t keeping up with the cost of living jumped from 41 percent in 2021 to 59 percent in 2023. Almost three-quarters of employees seek financial guidance from companies, which presents an opportunity for recruiters and HR teams to demonstrate their commitment to employee well-being. 

Finding a job is difficult in any economy, and this one is no exception. The most successful recruiters acknowledge the financial challenges candidates face, have open discussions about the best ways they can offer support, and provide transparency around salary and benefits. These are key elements of the candidate experience, which is more important than ever for attracting talent. 

Assessing and Addressing Candidates’ Unique Circumstances

Candidates aren’t interchangeable with one another. Their employment prospects and financial situations are heavily dependent upon the industries they are in, their professional aspirations, ages, and a range of other variables. For example, while 17 percent of candidates say they have been laid off within the past year, this proportion rises to 20 percent for job-seekers in the technology industry. This finding is consistent with the spate of layoffs that have shaken the tech world over the past several months, a trend that shows little sign of slowing down. 

There’s also a significant experience gap: 14 percent of candidates with one to three years of experience say they have been laid off, but almost one-fifth of candidates with over 15 years of experience say the same. Candidates who have been in the job market for longer are disproportionately likely to say finding a job is more difficult than it was a year ago. While 30 percent who’ve been searching for less than a month say the process is more difficult, this proportion rises to 63 percent for those who have been searching for seven to twelve months. 

Recruiters shouldn’t automatically dismiss candidates who have gaps in their resumes – they should instead try to understand why these gaps exist and evaluate each candidate holistically. Objective and predictive hiring tools such as pre-employment assessments and structured interviews allow HR teams to go beyond resumes and determine how well candidates will likely perform in a role. 

Transparency and Communication Are Critical

Although the headlines are filled with incessant talk of inflation, recession, and other economic woes, candidates remain optimistic overall. Eighty-eight percent are confident that they will be able to find a satisfying new job (including over two-thirds who are very confident), while 81 percent expect that they will be paid enough in their next role. The recruiters that provide clear and consistent communication about salary, benefits, and other aspects of the role (such as remote work options) will keep candidates engaged throughout the hiring process. 

The Criteria survey found that the top reason candidates abandon the recruitment process is poor communication from an employer. Beyond a lack of communication, the main causes of negative candidate experiences are misrepresentations of job requirements and salaries.

This is consistent with other findings, such as a 2022 survey which found that 98 percent of workers say companies should put salary ranges in job postings. A majority wouldn’t even apply to a company that doesn’t provide this information. Candidates have always been focused on transparency around salary and benefits, but this is particularly true as inflation cuts into their earning power and the economy contracts. 

A strong labor market has helped employees navigate a period of global economic turmoil, but many are still under immense financial pressure. While jobs outnumber workers roughly two-to-one, we are in a multi-speed labor market in which certain industries are struggling and others are still hiring very actively. Recruiters and HR teams need to take all these factors into consideration as they update their hiring processes, and they should be transparent with candidates at every step.

Josh Millet is the Founder and CEO of Criteria Corp.