In the ever-evolving landscape of business, agency recruiters often find themselves navigating challenging scenarios, one of which is the dreaded hiring freeze. A hiring freeze occurs when a company temporarily suspends its hiring processes due to financial constraints, restructuring, or external factors like Tesla recently did. These are very common in down economies. For recruiters, this can be a daunting situation, but there are proactive strategies that can help mitigate the impact of a hiring freeze and even prevent it from impacting your pipeline. In this blog post, we will explore essential techniques to help agency recruiters steer clear of a hiring freeze and maintain momentum in their recruitment efforts.
How to Avoid a Hiring Freeze:
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Proactive Workforce Planning:
The first line of defense against a hiring freeze is proactive workforce planning. By regularly communicating with client leadership and keeping a pulse on the company’s financial health and growth trajectory, recruiters can anticipate potential hiring freezes before they occur. Engage in open dialogues with department heads to understand their upcoming talent needs, enabling you to strategize and present a compelling case for continued hiring.
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Focus on Critical Roles:
In the face of uncertainty, prioritize filling roles that are essential to the company’s immediate and long-term success. By concentrating your efforts on critical positions that directly contribute to revenue generation and operational efficiency, you can make a stronger case for why recruitment should continue without interruption.
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Contract Staffing:
In the event a hiring freeze is implemented, recruiters should make sure that this does not slow the momentum of their pipeline. How is that possible, you might ask? One great way to avoid hiring freezes stopping deals in their tracks is through contract staffing. When a hiring freeze is put in place, the headcount budget at that client organization is typically unreachable. Thus, recruiting firms need to be creative in order to tap into other budgets. One way to do this is to start new hires on a temp-to-perm basis. This allows the client to hire the candidate on as a contractor to start, in doing so they must tap into another budget, typically assigned for vendors. The vendor is you! Then, once the hiring freeze is over, they can convert the candidate to a full time employee to accomplish the original plan.
Temp-to-Perm Example: Your client ACME, Co. is looking to hire a software engineer to start October 1st. Half way through the hiring process they let you know that the CEO has issued a hiring freeze and they must suspend the search. However, you know that they need this developer to finish some mission critical projects. Rather than allowing the deal to slip away, you propose a temp-to-perm arrangement. Let’s say the client agrees, and your candidate starts October 1st, as planned, but they start as a contractor on your (or your EOR’s) payroll. Then Q4 rolls by, and in January the CEO lifts the hiring freeze. You then ask your client to convert the employee to a full time employee of ACME, and you receive a conversion fee. Simple as that, the deal is saved, and the client gets the candidate they wanted!
Not set up for Temp-to-Perm? Use an EOR:
Many direct hire recruiting firms “stay away from” contract staffing because they find it too complex and difficult. However, this can hold them back from taking advantage of the benefits of temp-to-perm offerings. A simple way to add temp-to-perm services to your offerings is to partner with an Employer of Record (EOR). The EOR will take on all the employment responsibilities for the contractor while they are on the temp-to-perm assignment. They will handle onboarding, payroll, funding, timesheets, insurance, and more. Then once the contractor is converted to a full time employee of the client, they terminate the employee and you collect your conversion fee. Leveraging an EOR like FoxHire to enable temp-to-perm can help your business add much needed recurring revenue, and allow you to say “yes” to more client requests.
Next Steps to Avoid a Hiring Freeze:
In conclusion, while hiring freezes can pose challenges for recruiters, proactive strategies can significantly minimize their impact and even prevent them from occurring altogether. By fostering open communication with leadership, showcasing the ROI of recruitment, embracing data-driven practices, and staying agile with talent acquisition methods, recruiters can continue to drive their organizations forward, even in the face of economic uncertainty. Remember, the key is to remain adaptable, forward-thinking, and focused on long-term success.
