Waiting for the Thaw: Navigating the COVID-19 Hiring Freeze
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It’s no small feat to keep business moving forward during a global pandemic. Between the news cycle, mounting economic uncertainty, a suddenly remote workforce, and gaps from layoffs, hiring freezes, and leaves of absence, it’s easy to feel overwhelmed. However, there is always opportunity in the chaos.
There is a solution to weathering this crisis. It just requires a pivot in your approach to hiring and getting work done. Here, I’ll break down lessons I learned starting my business during the Great Recession. Based on that experience, I believe you should build an on-demand, blended team (yes, even right now), and I’ll tell you why and how to do it.
Hear more from Lisa Hufford on The Talent Economy Live:
Resource Gaps, Meet Business Demands
In our business at Simplicity Consulting, we hear from managers every day looking to fill talent gaps, whether due to skills gaps on their teams or layoffs, budget cuts, and/or hiring freezes due to COVID-19.
Anecdotal data points are in line with the national statistics. At least 40% of companies have implemented hiring freezes or reduced hiring, and 16% of CFOs anticipate layoffs while another 44% expect reduced staff costs such as furloughs. As of late April, roughly 1 in 5 Americans are unemployed.
Many managers are spread thin. They’re exhausted. What do I tell them? Find the opportunity in this situation. This is the time to get creative and innovate. Start with small, low-risk bets, translate your goals into projects, and experiment with using on-demand experts to accelerate your team.
We’ll get to what that looks like and how to make it happen, but first, let’s revisit the last recession.
Lessons from the Great Recession
I started Simplicity Consulting in 2006, and things really took off in 2008 during the global financial crisis and the burst of the US housing bubble. Though the situation and the scale are different, today, our business is seeing very similar trends to those of the Great Recession.
Back in 2008, companies cut costs with hiring freezes and mass layoffs, causing huge gaps in teams. Yet those same companies still needed to get business-critical work done. To do so, they turned to project-based consultants—on-demand experts who could focus on specific business-critical projects as needed.
On-demand experts make sense right now for a few key reasons:
- Access to high-quality talent. The best talent for your specific need may not be in the local market. Opening the door to on-demand experts allows your company to connect with the right personnel when you need them, no matter where they are.
- Budget lines. Hiring freezes do not equal freezes for vendors/consultants. While many companies had headcount restrictions during the recession, managers could pull from different budget lines (often operating expense) to bring on project-based consultants. In the current situation, for example, one of our clients was recently forced to lay off its entire product marketing team, yet didn’t let go of a single on-demand consultant. Different budget lines—and even in times of crisis, the work must go on.
- Cost structure. Full-time (fully burdened) employees cost the business far more than their annual salary. On average, wages account for 68% of an employee’s cost, with benefits accounting for the remaining 32%. Of course, benefits alone don’t tell the full story. Factoring in fringe benefits, overhead, and administrative costs, employees cost the company roughly two times their base salary. Consultants don’t carry the same cost overhead—you’re simply paying for their expertise. (Ideally, you’re working with a partner like Simplicity or Toptal that provides its talent with the benefits and perks of full-time employment so you don’t have to.)
- Speed. Marketing, engineering, sales, and IT roles in the US take on average 48 to 60 days to hire. In contrast, an on-demand expert is just that: on-demand. They can quickly be selected and hired (often in a matter of days), drop in, ramp up, and add value.
- Duration. “Project-based” means that you only pay for what you need, when you need it. You can hire an expert to complete a specific project or deliverable, then part ways when they are done.
The same solution applies in today’s economic climate—it’s amplified by the reach of this recession and a shifting workforce that desires flexibility.
Building Teams with a Capital T
In my last piece for Staffing.com, I outlined how modern managers can reach their goals with outside experts—a hiring strategy I like to call “building teams with a capital T.” In the pre-COVID days, it was a competitive advantage. Now, it’s imperative for success. Managers must broaden their perspective from team to Team, which means embracing a total talent strategy.
A team consists solely of FTEs. In contrast, a Team (a total talent-based strategy) includes a collection of resources helping an organization reach its goals. There is no standard template—a Team can be any combination of FTEs, consultants, freelancers, vendors, agencies, and contractors.
For example, in the current crisis, we’re seeing a spike in demand for communications experts. Faced with a sudden need to keep customers, stakeholders, and employees informed and engaged with more frequent communication, companies need to bring in the right experts—right now—to help them through this time. On-demand experts are enabling our clients to scale their efforts in a more agile way while successfully striking the right tone, messaging, and communications cadence, even in the midst of hiring freezes.
The benefits of building a Team extends beyond the stark realities of the current moment. They also enable managers to access the diversity of experts in the total talent population and free teams up to focus on what they do best.
A recent Oxford Economics study found compelling, positive impacts of using external talent: 66% of respondents reported that diversifying their team through external talent increased speed to market, and 47% said doing so improved their competitiveness in a digital world.
Building a Team doesn’t have to be complex or difficult. I encourage managers to start small, prioritize ruthlessly, and shift from thinking in terms of roles to projects. To help managers make that shift, I developed the SPEED™ Playbook.
How to Build an On-demand or Blended Team
In the current climate, how do you balance the resources you have with the resources you need?
The solution is SPEED: a fast, flexible talent strategy that enables innovative managers to build on-demand teams and keep their business moving with outside experts.
This hiring strategy was built from what I’ve learned leading my company for the past 14 years and observing thousands of managers struggle to find the right talent. This isn’t theory. It’s a very practical and intentionally simple methodology for you to integrate into your business today. It’s all about accessing the right talent at the right time for the right work.
SPEED guides you through the phases of a project’s lifecycle—from Success to Decide, calling out critical reflection questions and milestones along the way. It’s as applicable now as ever. Below, I detail the first step, Success.
You can use the SPEED Playbook (free download) to build your on-demand team. If you’re new to remote, I also highly recommend Toptal’s Remote Work Playbook, which offers guidance in six key areas on how to build blended teams: people, culture, productivity, security and support, tools, and common problems. They’re the world’s largest fully distributed company, so their Playbook is invaluable.
What Does Success Look Like Right Now?
The first phase of SPEED, Success, starts with a moment of reflection.
What does success look like right now? What’s working for your business? What’s not? Where are you not seeing traction? How have your goals changed in this new climate? Are you in need of different skills and expertise to accomplish those goals? What expertise do you have on your team—and what expertise do you need?
Start small. Pick one of your top priorities or gaps. Explore how you could break that into discrete projects. Then, pick one of those and—using SPEED as a guide—get an on-demand expert to help you complete the project.
Bring in an expert for a few months to experiment with that new social media channel or go-to-market strategy. Have you been thinking about selling into a new channel? Or reaching a new customer segment? Get targeted and tactical and focus on specific deliverables. Now is the time to experiment with these quick, low-risk, and low-cost methods to accelerate your business.
From there, rinse and repeat. You’ll quickly learn what works and what doesn’t and you’ll improve your ability to get results and drive the business, even in uncertain times.
Find Opportunity
Business will look different in the post-COVID-19 world. Remote work will become increasingly critical to success and business continuity, and so will blended, on-demand teams. Now is the time to rethink everything you thought you knew about working and building teams. The path forward from the COVID-19 pandemic demands it and will be unforgiving for those who attempt to cling to antiquated approaches. This is a difficult new reality to grapple with, but in doing so, we will craft better, more resilient businesses than ever before.
As you navigate this period of uncertainty, I encourage you to embrace the opportunity to experiment. Get creative. Innovate. Take small steps that have the potential to make a big impact. The time for waiting has passed. Now is your moment to make it happen!
Stay hopeful and stay healthy. Focus on what you can control. We’ll get through this together.
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