How recruitment start-ups can thrive in times of crisis
The onslaught of Covid-19 has impacted businesses across the world and caused widespread redundancies but it has also bred a wave of innovative start-ups. The pandemic has caused some to rethink their careers and focus on their own goals and ambitions. Others have been made redundant as a direct consequence of its effects on the economy and have made the decision to start up their own businesses rather than search for a job in a very difficult market.
The long and short of it is, we need start-ups. We need them to provide jobs, to kickstart the economy and to innovate. Not only has research shown that they create almost half of new jobs on average across OECD countries, many have proved essential in meeting the challenges the pandemic has thrown up, including the global move towards fully digital services. Their small size means they can react fast and flexibly to an ever-changing landscape and they can drive economic growth when many larger businesses are stalling. What they need is support, both financially and in terms of opportunity. With that, they have the ability to become one of the positive stories to arise from the ashes of the pandemic.
History has taught us that financial crises may destroy some businesses but they also create the impetus for others to form and grow – sometimes to huge heights. “You only have to look back at previous financial crises to see that this is the time for innovation,” insists Dave Jenkins, CEO of Wave. “It was during the last financial crisis that the likes of WhatsApp, Uber, Instagram and Slack launched.” Look further back and Microsoft, FedEx, Revlon and IBM were all also created amidst or shortly following an economic crisis. Over half of all Fortune 500 companies were established during a crash.
Innovation is the key word here. To be successful amidst a crisis you need to offer something different, something that people need but that isn’t widely available or that others are being slow to adapt to. Indeed, a capacity to quickly adapt is essential. The start-ups that will soar will be those that address new behaviours, wants, needs and ways of working that have developed as a direct result of the pandemic. For example, the almost instant move by an entire planet from office work to remote working has necessitated different ways of recruiting so some recruitment start-ups might be investing in intelligent online recruiting technology and sophisticated video interviewing tools.
Established businesses find it harder to adapt, whereas start-ups are beginning from scratch so can build their business to match the new and changing landscape. Those that got going before the advent of Covid-19 but are still small will find it easier to pivot – putting certain projects to one side, changing direction, reacting quickly to market changes. Many start-ups also work either partly remotely or are easily able to transition to online working. Widespread remote working seems set to stay for the long term, long past the end of the crisis, so start-up recruiters that take advantage of this new normal will do well. Remote interviewing may too be a trend that sticks as people capitalise on time and money saved by not travelling.
Another bonus of creating a business during an economic crisis? Your pick of talent. Something we all now know is that, due to high numbers of redundancies, the pool of talent is fast expanding – and will undoubtedly grow further once the furlough scheme ends at the end of October. WaveTrackR data shows that the number of applications has increased by over 100% for the past 2 weeks compared to the March-June average. Huge numbers of talented people are finding themselves out of a job but with a lack of jobs for which to apply. Start-ups are one of the few types of business that might be actively hiring so can capitalise on this newly formed pool, taking advantage of the wealth of talent that has found itself there.
There are huge advantages to starting up a small company right now but there are also obvious barriers that start-ups might face, the biggest of which has to be funding. In a financial crisis, it is hard to find investors. Unfortunately, government aid often neglects start-ups which, given their propensity to create jobs, is surely misguided. Crowdfunding is one solution and, indeed, some crowdfunding platforms were born as a direct result of start-ups needing finance amidst a recession.
However, we also need other businesses to help where they can to try to support these start-ups. As we begin to recover from the financial effects of the pandemic, start-ups offer a way for the economy to grow and will be one of the biggest job creators, something that will be clearly be needed. WaveTrackR data is showing that, though above the March-June average, jobs are still incredibly sluggish, and have even decreased over the past two weeks. Wave have responded to this need to help support micro businesses and start-ups in the recruitment industry and have responded with an offer to equip them with every bit of tech a small agency would need to get up and running straight away.
With support, start-ups could help forge the way towards economic growth once more. Pre-pandemic, the global start-up economy had been growing in excess of 10% each year – that’s three to four times faster than the rest of our economies. If we help to nurture and support them now, they will in turn help to bolster our struggling economy.