COVID19 has exposed the lacunae present in the corporate world. With more than 40 million job losses and the unemployment rate close to 50%, the trust in the organizations has reduced.
Moreover, the failing business due to the COVID19, specifically in sectors like retail, have led to pay cuts too. The mass lay-off in IT giants has posed a bigger question about job security.
Amidst the inundation of pink slips across different quarters of employment, a counter-intuitive question might be:
Is hiring new employees a better decision during the pandemic?
Honestly saying, there is no one right answer to this question. But, to answer it better we must not restrict ourselves only to one domain.
Wearing the hat of an HR might be the first choice, but you must not miss out the aspect of the economics of demand and supply.
Understanding the strategy of firing during COVID19:
A very popular term that every Human Resource student must be aware of is the Recency effect.
What is the recency effect?
When the HR managers go on a hiring spree, the bias that the recruiter has for one candidate, based on the performance of a previous one, is called the recency effect. In this bias, the recruiter doesn’t necessarily picture the entire story, rather fails to look through a larger angle.
In a similar manner, when a situation like pandemic takes place, the leading decision-makers of the organization are unable to see the bigger picture.
With the falling revenue, the top leaders are moving forward to protect their firm’s standing in the market. As a result, in order to cut down on the employee costs, the organizations have started to issue pink slips to the employees.
Should organizations go for a hiring spree now?
What if we told you, the entire plan was to go on a hiring spree?
Let us involve a bit of economics for a better understanding.
Supply of labours was very low before the COVID19 began, globally. Moreover, the ticket size of employment was also rising, either due to the growing experience or due to the skewing supply.
The pandemic has led to the reduction of sales.
Sectors like retail have recorded sales growth in the negative. Though sectors like hospitals, healthcare have seen an upsurge when for manpower requirement.
But, on a larger scale, this reduction in growth has resulted in a diabolic condition, that resulted in manpower reduction.
This led to an increase in the supply of people in the labour market. With the increased supply of workforce, the following changes are taking place simultaneously:
Sustenance of the market players:
The organizations, in order to combat this situation of cash crunch, has sacked people. But, on a larger scale, these organizations have sustained the impact of the pandemic.
Increased labor market:
The increased supply of the workforce in the labor market will push down the cost of the labor. In turn, this will lead to cheap labor, compared to the previous prices.
The advent of new technologies:
Now, certain jobs will see a dead end. Jobs like on-field sales will be reduced to a large extent due to the pandemic. This would lead to the growth of digital sales technique. Such new techniques will need newer labor forms.
With the above changes in the market-place, it thus gets evident to wait for a little before organizations begin to hire.
Is the same rule applicable to all sectors?
Different sectors have reacted differently to this pandemic. Sectors like healthcare and pharmaceuticals have seen an increase in demand for services. In this sector, this is the most appropriate time to hire the best candidates.
On the contrary, the hotel sector has crippled, and its backbone has been broken. We would recommend having a wait and watch for the organizations in this sector.
The next sector would be the FMCG sector. With the growing fear of food running out, and if we remember the fight of Australian women in the mall, retail will soon see a sharp growth. So does the sector of logistics, supply chain and digital marketing.
Gaining new talent in these sectors will be the right HR move during this time. Especially if your organization depends largely on the marketing team, it is the best time to strengthen the team.
The digital transformation might lead to a greater demand for enriched consumer experience. The hiring of the technical geeks should be escalated before the cream gets taken away by the corporate honchos.
Moreover, we would see the new vertical emerging out across different organizations who would be termed as ‘pandemic specialists.’ Their main task will be to research the business ideas and business strategy that can prepare the organizations for any further pandemic.
Reshaping the business through right hiring at the right compensation will be the key driver across industries for the next 5 years.
Hiring Temporary Staff Can Be Another Option:
If your organization is looking for the temporary candidates and hire them at affordable costs, look no further than temporary staffing Portland agencies.
Availing the best candidates during the pandemic can be a concern as the supply of the labor force is more. A recruiting agency can streamline the recruitment process and help in saving the employee costs too.