Anticipate Company Risks in Your Recruiting Plan

Risk is an inherent part of running any company. It’s unavoidable, and if you don’t take the right steps to anticipate and prepare for a wide range of risks, you’re asking for trouble.

The recruiting process is no exception. There are lots of potential factors that can disrupt, slow down, and even derail your hiring activities, so it’s essential to be aware of these risks as much as possible and have risk management plans in place to mitigate them.

In this playbook, we’ll look at why it’s so important to anticipate recruiting risks, some of the key risks to be aware of, and some concrete steps you can take to ensure your recruitment process is prepared to handle different types of business risk.

Why it’s important to anticipate risks when recruiting

Risks can impact your budget. When things go wrong, the result is often costly, and recruitment budgets are often tight to begin with. An unexpected event can have a severe impact on your recruiting funds, slowing down your progress when time is of the essence.
Risk factors can impact staff needs. There are many reasons why your staff needs may go up or down over time, often suddenly, and it goes without saying that this will change the way you recruit. A sudden fluctuation in staff needs can massively disrupt your well-laid hiring plans.
Risks can alter your priorities. Risk factors can impact a company’s priorities, sometimes significantly, which can affect the funds dedicated to recruiting and draw staff away from hiring activities.

Common risks to be aware of

Let’s take a look at some of the common business risks companies should be aware of that can impact your recruitment process as well as the business in general.

Economic disruption and financial risk. Recessions, inflation, shifting currency exchange rates and interest rates, and other major economic events can have a major impact on the way you run your business and your bottom line, and they often come with little warning. When it comes to recruiting, economic disruption can mean tighter budgets and fewer staff members to handle hiring needs.
Natural disasters and large-scale unexpected events. The COVID-19 pandemic is an excellent example of this. It seriously disrupted businesses (and their recruiting processes) across the world. This can also include the effects of climate change as they become more severe — which may interrupt hiring activities and make it harder to recruit in more heavily affected regions.
Loss of key staff. Losing a valued staff member always comes with a number of negative consequences. From a recruiting standpoint, it means there is a sudden need to fill that position, ideally with someone equally qualified. When it comes to highly experienced and specialized staff, this is no small challenge.
A down round — where your company valuation turns out to be lower than previous rounds — which can force a rethink of spending and a reassessment of hiring plans.
Reputational risks, such as a poorly perceived marketing campaign, a high-profile scandal, or a failure to protect customers, can easily reach the media (or social media) and seriously damage your company’s reputation. In the context of recruiting, a poor company reputation can discourage talented candidates from applying.
Data breaches and other cyber attacks. Data breaches are a constant risk for companies, and they’re on the rise. 2021 saw the average number of cyberattacks and data breaches grow by 15.1% compared to the year before, and even one breach can be devastating. For recruiters, a breach can mean major disruption in funding and even damage to company reputation which can dissuade applicants in certain areas.

How to anticipate and prepare for business risk

Although today’s recruiters and businesses face numerous risks, the good news is that there is also a lot that companies and recruitment teams can do to anticipate and prepare for them — increasing your company’s ability to deal with challenging situations.

Risk assessments

A risk assessment involves conducting a comprehensive review of the company to identify as many potential risks as possible. Typically, this means breaking risks down into different categories and then assigning each risk a score according to its likelihood. For example, your company may be at low risk of losing key staff, but high risk of a data breach.

This kind of analysis allows you to focus on vulnerable areas while taking risk mitigation steps to prepare for worst-case scenarios.

Have plans in place for how to deal with each risk

Contingency and crisis management plans for each risk should be in place across the whole company, and recruitment teams should also have their own specific plans ready. For example, your team should have some idea of what to do in the event of the unexpected loss of a C-suite leader. This is one area where network recruiting can play a key role — helping you continually network with a strong group of candidates even when you’re not actively hiring.

On a wider company level, you should also anticipate and pre-empt risks wherever possible, for example by investing in stronger cybersecurity and data security and building in business continuity plans to keep business operations running even in times of disaster.

Build flexibility into your recruiting process

One of the best antidotes to risk is adaptability. Design your recruiting process to be flexible enough to handle sudden change, by having backup plans and agile processes. This way, even when circumstances change quickly, you’ll be in a strong position to respond and keep things moving forward.

Have clear plans for when to make changes

Not all risk factors force change. An event like a financial loss, for example, might not be severe enough to impact your recruitment process, especially if recruiting is a current priority. It’s important to know when you need to make a change, and when to stay the course — and be clear about this distinction so your team knows what to do at all times.

In a similar vein, it’s valuable to have a number of different approaches to recruiting that you can switch up as your circumstances change. For example, when you’re hiring in large amounts and have a lot of excess cash you might gravitate towards job board postings, but you should still nurture a strong recruiting network as an effective lower-cost alternative if funding is scaled back.

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