After one of the longest bull runs in the history of the markets, the winds of change are blowing through the financial markets. It seems like the effects are flowing through different parts of the economy and big companies have already started announcing lay-offs.

Since we have just launched a recruiting business, a lot of people have asked us “how do you think a down-turn in the economy will impact your site?”

Our answer has stayed the stayed the same, “There is still lots more demand for professional people - especially in IT - than there is supply. Also, good companies always need good people. The only thing that will really change is that referrals will become even more valuable.”

Why do we think referrals are even more valuable in tougher times? There are at least 5 reasons:

1. As things get tougher, adding value to your network will help position you if your own situation changes (you get retrenched, your company starts to run into trouble, you just want a change)

2. As more people are looking for work, employers will get more irrelevant applications. This will increase their cost and time to hire. In this environment, referrals provide a great filtering mechanism

3. Good people - even in tough times - are usually working. As the external job market gets tighter, those people are less likely to be out looking for work. Referrals are a great way to get to those people

4. Cash is king. Other income sources may be effected during tough times. If you participate in a referral program that pays you a reward, you can earn some much-needed extra cash AND help people in your network

5. What goes around comes around. If you make great referrals to recruiters and employers, they may well look favorably on you if you ever come to apply for a job with them… or even help you transition when you want a change.

So, help yourself and your network by making quality referrals to people you know and recommend… especially as times get tougher.

By Riges Younan

10 trends for recruiting in 2009 by Michael Specht

‘Referrals. Time and time again referrals provide the highest quality hire at the lowest cost.’

By Riges Younan

Good overview by Dr. John Sullivan. Number two on the list is “referral programs”

‘Reinvigorating referral programs. Despite the growth of career-related Internet sites, the highest volume and quality candidates still come from well-designed employee referral programs. While heavy adoption was initially hampered by cultural issues around the world, today such programs are proving highly effective everywhere. Key focus areas include proactively approaching key employees for referrals (program targeting), leverage non-employee referrals, making reward systems more comprehensive, immediate, and visible, and last but not least, helping employees leverage social media to restore relationships, make new relationships, and build stronger relationships. Firms to watch: AmTrust Bank, Edward Jones, Whirlpool, and Amazon.com.’

By Riges Younan

Nice post by Mick Liubinskas on why it’s a good time to start a business, it’s positive and the logic makes sense.

I agree that people are more important then the idea but don’t agree that the supply and demand equation for hiring rockstars will dramatically change. I won’t go into the detail but demand for highly skilled and professional talent is a long term demographics based issue that even a downturn in the economy won’t change. You may get your hands on the back up vocalists in the band but the rockstars who are essentially the the heart of the business will be well looked after by their companies, so that when things turn again ( and as we know they will ) then those smart companies can capitalise because they have the superior talent to execute. Spoken like a true recruiter i know but hey I’m betting my business on it

By Riges Younan

I was contacted by David Campbell from lovedigital last week to get my views on how digital & social media is impacting the recruiting industry. Listen here

how do you think it’s impacting our industry?