What does an economic downturn mean for your company?

Written by Technically Media CEO Chris Wink, Technical.ly’s Culture Builder newsletter features tips on growing powerful teams and dynamic workplaces. Below is the latest edition we published. Sign up to get the next one.

A group of tech CEOs last month made a bet. In May 2023, how would we view the presently looming economic downturn? Worse than feared, or not as bad? The 10 of them were split.

High inflation and raising interest rates has hit public markets, private valuations and consumer sentiment. Economists are back on recession-watch. The Federal Reserve Bank wants things to cool off. But unemployment is low, consumer spending is up and the American economy is far stronger than it was on the eve of the Great Recession 15 years ago.

As a business owner, “you can over-correct,” said Cliff Jurkiewicz, VP for global strategy at Phenom, an 1,800-person talent platform company. They sell HR software so Jurkiewicz is motivated to make sure companies plan to grow, but he also gets to see what thousands of executives are doing right now. “In 2020, lots of people were holding their breath, while others saw the disruption as an opportunity and took action.”

What are company builders supposed to do now?

Strengthen your cash reserves, as inflation erodes its value. Review: What of your product offerings seem most resistant to an economic downturn? Prioritize the value you create for your clients and customers. A private equity analyst told me this week that he’s already seen a flip in priorities, from fast-growth to healthy margins.

Rocky economic waters are a reminder to strengthen your company’s balance sheet, while not ignoring the future. Maybe that feels like a funny time for Jurkiewicz’s firm Phenom to drop its State of Candidate Experience this month. But Jurkiewicz says he doesn’t see companies climbing into the proverbial bunker yet.

If anything, now is the time to bolster hiring strategy, he says, including how you develop your company’s employer brand and engage applicants down to conversion. As Jurkiewicz reminds me, the vast majority of job applicants will never work for your company. It’s a chance to create fans. The report is a review of candidate experience of Fortune 500 and European 100 companies from May to September 2021 across attraction, engagement and conversion. How are they doing?

The report includes lots of references to technical tools that Phenom sells to its clients, like social login, chatbots and automated status updates. Jurkiewicz says that half of prospective candidates are lost on each click they have to make to finally apply (though one-click job applications have their flaws). Few big companies have all those solutions on their company career sites without the help of a third-party like Phenom.

There's very high demand for talented people and that will always exist, regardless of market conditions. Think like a scout, not waiting on the sidelines.

Other gaps the report cites can be addressed by companies on their own.

In recent years, according to Phenom, most companies have improved job description quality. Others should follow suit. The majority are publishing employer brand marketing, including video to help applicants better understand the prospective work environment. More should join in, they argue.

Almost three-quarters of the companies reviewed use at least six different platforms to promote their open jobs, including the big platforms and niche players. That might relate to the challenge that just 4% of even big company career sites had strong search page rank, meaning third-party support was important.

Few companies do well in giving applicants updates on the process. That relates to the pandemic phenomenon that candidates began ghosting employers more often.

In short, there’s lots of work to do. Jurkiewicz says the recent 2020 recession may have more to teach than the more prolonged Great Recession.

“In 2020, ramping up helped because the bottom didn’t fall out,” Jurkiewicz said. “There’s very high demand for talented people and that will always exist, regardless of market conditions. Think like a scout, not waiting on the sidelines. There’s little to no risk being prepared.”

It seems likely our economic world has shifted again. We may not see such low interest rates for a long time, which will influence private market business investing. Different sectors will be hit differently. But if your company is creating value, always bet on yourself. As one repeat founder told me in 2020: In a recession, the best companies rise to the occasion.

In that room of CEOs, I was part of the group that said whatever economic turmoil we’re heading for won’t be as dire as it feels right now — with a pandemic, the highest inflation of my lifetime and war. Make your organization more resilient. Don’t hide away.