Why downturns can be the time for growth, not cuts.
As market volatility—from inflation to layoffs to bank collapses—continues to make headlines, companies are (understandably) getting increasingly nervous about what lies ahead. Even companies that aren’t yet directly experiencing slowdowns are getting more and more concerned as they watch other industries and businesses grapple with challenges.
That bubbling anxiety can often nudge companies toward taking proactive measures—cutting costs, reducing headcount, and instituting hiring freezes. And while tightening the purse strings might seem like the most logical step to ward off or weather an economic decline, compelling research says otherwise.
In fact, a downturn might be the right time to move in the complete opposite direction: growth and hiring. Here’s why.
1. Snag top talent
As layoffs continue at large players like Amazon, Meta, Google, and more, there are a huge number of skilled and qualified candidates available (from an employer perspective, there is low hanging fruit in layoff announcements, and passive talent not engaging in the job boards but available for the right opportunity). For companies that need talent—particularly tech talent—it’s a boon to hiring efforts.
Non-tech industries like pharmaceuticals, hospitality, and even the Department of Veterans Affairs are jumping on the opportunity to hire talent that wouldn’t otherwise be available—or would previously be swayed by open positions at those marquee tech names.
And while smaller companies might not be able to compete in terms of perks or even salaries, Gallup research found that there are plenty of other motivating factors in 2023 that job seekers are prioritizing in their searches for new roles, including work-life balance, the ability to play to their strengths, greater job security and stability.
Plus, growing your staff now means building a more skilled and resilient company that’s ready to maintain productivity and pull through whatever challenges come next.
2. Boost your brand
Job cuts are tough. Even when layoffs are handled as sensitively and delicately as possible, it still feels like bad press for a business—particularly one that plans to continue to hire, but in more strategic areas.
With posts about job loss littering everybody’s LinkedIn feed, many job seekers feel hopeless. When they see a post from a company that’s still actively hiring, it’s like a life raft in choppy waters—a promise that opportunity is still out there. And it often gets a lot of traction too.
Hiring and growing during downturns positions you as a resilient business and differentiates you from your competitors in the eyes of both job seekers and customers.
3. Gain a competitive edge
When seemingly every other company is taking its foot off the gas, being the one to put the pedal to the metal might be the competitive edge you need to thrive—even after the economy rebounds and the landscape normalizes.
As McKinsey states, “Outperforming executives break the powerful force of inertia by prioritizing growth.” According to McKinsey’s recent research, “growth-oriented leaders react decisively to shorter-term disruptions that can be turned into opportunities.”
McKinsey calls those disruptions “timely jolts” and says they represent an opportunity for companies and leaders to “build organizational resilience and agility to respond to change and leverage disruption.”
So while the urge to hunker down and let the storm blow over is strong, top-performing companies actually capitalize on the broader climate.
Don’t confuse panic with proactivity
It can undoubtedly be concerning to watch as industries and the entire economy shift around you. But don’t let it trigger hysteria and rash decisions.
Of course, for companies already struggling with strapped resources, growth and aggressive hiring likely aren’t pressing priorities as they simply try to stay afloat.
But for those that aren’t experiencing direct slowdowns yet still feel tempted to slash costs and stash money under the mattress? They might be better served by keeping a cooler head and moving in the opposite direction of other companies: toward growth.