Typically, the benchmark for declaring an economic recession is six months or two consecutive quarters of negative gross domestic product (GDP). The U.S. economy has slowed for six straight months. So, should we finally declare recession 2022? Well…
Since COVID-19 hit, nothing is simple. It’s true that the economy is slowing, and inflation is near its highest level in four decades while interest rates continue to rise. However, the unemployment rate is 3.5%, which is the lowest it’s been in half a century, and employers continue to add jobs.
So, while economists and pundits debate whether the U.S. is truly in a recession, the answer may not actually matter. It’s a fact that the economy is slowing, while high inflation and high interest rates erode the purchasing power of most Americans. A recession impacts every company but can be incredibly challenging for small businesses.
Fortunately, there are ways that small businesses can remain profitable and even thrive while navigating a recession.
Adopt an agile talent strategy
Layoffs are the first solution many companies implement to save money. However, layoffs can also hurt a company by losing valuable workers and negatively impacting both customer service and value delivery. Instead, companies should consider shifting to an agile talent strategy that enables businesses to quickly scale up and down without sacrificing quality or customer service.
For every business, employee roles fall into two broad categories: core and non-core.
- Core positions directly impact consumer perception and customer service. These roles drive customer value delivery, business performance and give a company an edge over the competition. Some examples could include sales and management.
- Non-core positions support the core roles. These jobs are essential to running the business but do not directly impact the customer. Examples may include marketing, social media strategy and administration, copywriting, graphic design, and website design and support.
Specific core and non-core positions vary from company to company. So, the first step in adopting an agile talent strategy is to determine which jobs provide core value and which are non-core (and which ones may no longer be necessary).
Once these roles are understood, it’s time to rethink who does the core and non-core work. Core work is likely done by employees, but even current employees may need to have their responsibilities shifted around.
Non-core work is ideal to outsource to quality contractors. Using this agile talent strategy, companies can scale up — and down — on demand, providing much-needed agility during unpredictable economic times.
“An agile talent strategy is a fundamental shift in how businesses access talent that gives small and mid-sized businesses the edge they need to compete,” said Elizabeth Eiss, Founder and CEO of the talent curation and freelance recruiting platform ResultsResourcing. “When describing an agile talent strategy, the verb we use is ‘access’ talent instead of ‘acquire’ or ‘hire’ it in the traditional full-time sense. Adding specialized expertise on demand allows companies to succeed during turbulent times.”
Focus on the strengths that make your company special
Researching the shift to an agile talent strategy will also help you identify and define what separates your business from your competition. A recession is precisely when you need to lean into these strengths.
The goal is to make your business “recession-proof,” and that means making your products and services essential – to your specific clients, at least. For example, a bakery that receives many requests for gluten-free products should showcase that aspect of the business. This strategy will help you stand apart from your competition, which becomes increasingly important as spending power shrinks.
However, make sure that any move you make serves your consumer base. You do not want to make moves that could alienate your most loyal customers. Steady consumers are less likely to leave during a recession if you do not give them a reason to go. Find ways to reach out and nurture your relationship with these customers; they may provide the edge to survive the recession.
Keep your eye on the future
When money is tight, it can be very easy to narrow your focus to only immediate, short-term concerns. However, it is crucial to remember that every decision you make impacts the future of your business.
For example, if you need to reduce costs, use a scalpel, not a machete. In other words, avoid cuts that negatively impact your operations. Carefully review your spending to trim those areas with the lowest return to your organization.
Similarly, while every impulse tells you to hold on to every penny, this may be an ideal time to make long-term improvements, such as investing in new technology. Making thoughtful changes could help you navigate the recession by providing new insights and assisting your business to become more agile.
Agile businesses are better equipped to navigate a recession. When your small business is ready to shift to an agile talent strategy, you’ll want a freelance recruiting platform and service that matches business owners to specific, vetted freelance talent. Please reach out to ResultsResourcing for a complimentary agile talent assessment. To schedule, CLICK HERE.
