Chat with us, powered by LiveChat Waiting for Companies to Finally Pull the Hiring Trigger - Top Echelon

Waiting for Companies to Finally Pull the Hiring Trigger

by | Aug 20, 2010 | Recruiter Training, Top Echelon Blog

In my previous blog post, I discussed the fact that worker productivity in the country fell for the first time during the past 18 months.  That’s an indication that instead of hiring more employees, companies are attempting to squeeze every bit of work out of their current employees as they possibly can.  That strategy has worked well for over a year now, but it seems as though its effectiveness may be over.

However, that might not be enough to convince companies to start hiring new employees.  The problem is that many of them are extremely reluctant to hire due to the most recent recession.  Not only that, but with talk of a “double-dip” recession intensifying in the national media, that gives companies all the more reason to hold their hard-line hiring stance.

In fact, there seems to be more evidence that companies are continuing to hold this stance.  That evidence is this: according to a U.S. Department of Labor report released on Thursday, the number of first-time filers for unemployment insurance rose for the third time in a row.  The total?  Approximately 500,000.  The week before, there were 488,000 claims filed.

Here’s the crazy part about this whole situation: there are many companies—especially the larger ones—that are not hurting for cash.  Many of them are actually doing quite well and enjoying substantial profit margins.  But… they aren’t compelled to hire, even though worker productivity has taken a hit recently.

Unfortunately, there’s a catch-22 involved here.  In order for the recovery to generate any momentum and pick up steam the way everybody wants it to, companies have to hire more employees.  The jobless and unemployment rates are crippling the economy at the moment and hampering any chances of a full-blown recovery.

The problem is that companies are not willing to hire again to any large degree until the economy shows more signs of recovery.  But the economy won’t show more signs of recovery until companies are willing to hire again.  So where are we?  In a stand-off, apparently, and it looks as though consumers/employees are getting the short end of both sticks.

Consumers are being counted upon to bear the brunt of the recovery (through spending), but they don’t have the money necessary to spend in order to move the recovery into high gear.  Basically, their hands—and their wallets—are tied.  They’re the proverbial one-legged man in a butt-kicking contest, and in the end, it’s their butts that are being kicked.

All that aside, how much longer can companies maintain the status quo?  Do they perhaps not care about decreasing levels of worker productivity, just as long as they can keep their overhead down by not hiring new employees?  That’s a distinct possibility.  What’s known is that they can’t keep doing that forever.  What’s not known is exactly how long they can keep doing it.  A few more months?  Another couple of quarters?  A year?

However long they wait is directly proportional to how many new job orders they give to recruiters, and the longer they wait, the more pent-up the demand is going to be when the hiring floodgates eventually open.  When companies finally make the decision that yes, they can’t wait any longer to hire new employees, they’ll more than likely be looking to fill three or four or five positions, rather than just one.

So in the short term, companies may still choose to keep their employee count where it is, but in the long term, they’ll eventually have to add employees… and they’ll need to enlist the services of recruiters in order to add them.  (That is, if they want to add the best.)

More than anybody, recruiters have their collective finger on the pulse of what’s happening in the world of employment and hiring.  What are your clients’ stances in terms of hiring?  Are they issuing new job orders, or no?  If they are hiring, are they taking an inordinately long time to make decisions?  And what’s your opinion regarding the economy and the recruiting industry?  What do you believe the future holds?

More Articles of Interest