Why security businesses should keep hiring during a potential economic downturn
There is no doubt about it, the companies in the security technology space have been enjoying record years between 2021 and 2022 in the post-pandemic market. The V-Shaped recovery has launched us back into growth numbers greater than years prior to 2020, and companies are feeling the unique pain of their ever-growing backlog. It seems like nearly every company we connect with is buzzing with business and can’t move fast enough to meet their client’s orders. A great problem to have!
But what about this “impending recession” that is supposed to be dooming us with its presence by the end of the year? Inflation is at its highest, rates are increasing, and the signs are pointing in that direction potentially. While no one has a crystal ball to see into the future, planning ahead will always help companies prevail. Whether the forecast includes a recession or continued growth for the future, do not be short-sighted. Companies that have the ability to adapt, think strategically, and ultimately look out for their people will get very far in trying times and in periods of great economic growth.
Four Keys to Adaptation
How will companies in our space adapt to stay ahead of a potential recession and come out relatively unscathed? Since 2020, there have been several lessons that we can take away and use to prepare for another potential economic downturn. Here are four keys:
1. Services rule the security industry.During the pandemic, subscription-based services were succeeding and, in some cases, keeping the doors open for many companies. Salespeople had the opportunity to sell recurring or SaaS-based services that generated RMR. This payment structure kept businesses with money coming in the door and kept sales representatives making money during those trying financial times.
2. Customer service is crucial. People work with who they like and treats them well. One thing we learned about our space during the COVID crisis was particularly interesting: In the service industry that security provides, customer service is what sells during a recession. Bad customer service can lead to losing clients – and ultimately employees – as it affects their reputation as well.
3. Do not stop hiring. This one is confusing. During recession, many companies are making cuts across the board to stay afloat. The reality is that recessions are temporary. Good candidates will surface on the market and could benefit your organization long term. Do not miss out on the opportunity to capture a great piece of talent due to temporary concerns. Try to think holistically about the future of the company and ultimate gains that exceptional candidates can bring to the table. Seize the opportunity to broaden your talent and get ahead of your hiring needs because when the market bounces back it will be much easier.
4. Budget accordingly. While specialized talent is not cheap, when things get tough, many companies lay off candidates that they have specifically sourced and sometimes worse, paid thousands for in recruiting costs. While sometimes layoffs are inevitable, I encourage companies to seriously think about the long-term effects of their decisions.
During COVID, some companies got talented and banned together to protect jobs. This included companywide temporary pay cuts, executive pay cuts, and even four-day work weeks. These decisions were strategic: Instead of letting top talent go for a temporary savings, they thought long-term about their budgets and how they could protect their people and their wallets without hindering business growth and hurting relationships with their people.