How Contract Recruiting Firms can Help Recession-Proof your Organization

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How Contract Recruiting Firms can Help Recession-Proof your Organization

The economic crisis has global businesses bracing themselves for the likelihood of a recession. The prolonged Covid-19 impacts, rising inflation costs, and continuing supply chain issues are among the factors contributing to an impending economic downfall that could soon hit home with many companies' hiring efforts. 

During a recession, keeping your operations stable and hiring based on need is vital. Although, most startups' instinctive responses would be to halt hiring or postpone essential projects, this doesn't have to be the case. According to talent acquisition professionals, keeping your long-term goals top of mind, pursuing projects that produce ROI, and retaining existing talent are advisable. 

Startup leaders should consider alternative hiring options to help protect themselves against a potential downturn. Contract recruitment is a hiring solution that can help startups survive a recession. Now more than ever, companies need to save costs, and outsourcing business functions, including recruitment, can help with that. But is it applicable to your business or hiring scenario? In this article, we'll cover how contract recruitment agencies can help your startup maneuver the challenges of the oncoming recession by leveraging one of the most vital resources-talent.

Table of Contents

    What is a Recession? What are the Signs to Watch Out for?

    A recession is a considerable decline in economic activity lasting months or even years. It happens when a country's economy experiences negative gross domestic product (GDP), reducing retail sales, increasing unemployment levels, and falling industrial production for an extended period. 

    While there's no way to anticipate the future, you can look out for certain signs that can predict an oncoming economic "hurricane." Knowing these signs could be advantageous, as it helps you build strategy and flexibility for your startup and prepare for what's to come. 

    These signs are: 

    • Global economic slow-down- According to the IMF's baseline forecast, economic growth has slowed from 2021's 6.1% to 3.2% in 2022 and 2.9% in 2023. This is a reflection of stalling growth in the world's largest economies- including the U.S., China, and Europe regions- with significant consequences for the international outlook. 
    • The decline of small businesses - Half of small business owners (43%) say inflation is the biggest risk to their business right now, a new high over the past year and up from 38% last quarter.
    • Rising unemployment levelsTech startups have so far in 2022, laid off over 93,000 employees. 
    • Stock market crash - Bank of America research found that stocks are likely to fall further into 2023.

    This crisis has affected startups, making it harder for them to access capital. Investors and banks have become much more selective in new investments, lowering the frequency of financing rounds. So, early-stage startups can expect reduced valuations, smaller round sizes, and fewer deals. 

    How the Oncoming Recession has Affected Hiring in Tech Companies?

    With the cost of capital starting to increase, the tech sector is pulling back on growth, forcing companies to authorize layoffs, implementing hiring freezes, and retracting job offers. Companies that have announced layoffs and cuts include Cameo, Netflix, Noom, On Deck, Peloton, Robinhood, and Workers. Uber, the ridesharing app company, also said they'd pump the brakes on hiring because of a "seismic shift" in the market. We could go on and on, but it's evident that we're facing a global economic downturn. 

    Tech Startups can Hire Contract Workers to Survive the Recession

    With the unpredictability of today's business climate, it is difficult for companies to plan more than a few months into their future. Contract and remote work are ways that businesses can fill positions with flexibility while also being able to access top talent from around the world without any long-term commitments--a win/win situation!

    Contract workers are a compelling solution for tech start ups as they offer the opportunity to scale up or down as needed. Traditional onboarding efforts are also costlier compared to the contract recruitment route. Depending on the contract firm hired, tech startups can find niche talent in areas such as web design, information technology or QA analysts. With global contract recruitment platforms such as TECLA, you can hire for both auxiliary or peripheral functions, giving you access to top software developers, to spearhead application builds, routine maintenance and more. 

    Get in touch with TECLA to connect with the best nearshore vetted tech talent ready to interview with you.  

    Don't Let your Startup Fall Apart. The Benefits of Using Contract Recruitment Services

    Cost saving opportunities

    Businesses are looking to cut unnecessary costs during a recession. Working with a contract recruiter lets you cut talent acquisition-related costs. These include:

    •  Hiring costs – Working with a professional recruiting firm on a contract basis means supplementing your recruitment efforts, helping lower your cost-per-hire. Also, you're leveraging a temporary hiring model compared to offering a full annual salary and an expensive benefits package.
    •  Time-saving- A recruiting firm like TECLA helps save time and money. They'll deal with the time-consuming bit of the hiring process, from creating and distributing job ads to reviewing resumes and initial screening. So, all you need to do is choose your picks from a talent pool that has already met the job specifications, gone through reference checks, and more.
    • Costs linked to an economic downturn- Now more than ever, the economic market and hiring demands are uncertain. When you outsource recruitment efforts to contract job recruiters, you avoid bearing the financial costs linked to adjusting talent and resources to meet your needs.
    •  Operational costs – You only pay contract recruiting experts for the required services. This flexibility makes it easier to scale resources and estimate costs based on your needs. 


    When working with contract workers, hiring models are flexible. During times of uncertainty, companies need to be flexible to stay afloat. You can add to your workforce rapidly and with less red tape than if you were to recruit a full-time employee. At the same time, this hiring flexibility also protects your core workforce's positions. TECLA allows tech companies to hire remote talent in LATAM, letting them determine contract(s) lengths and whether they want to extend.

    Scalable support

    With fluctuating markets, companies can easily get caught up in the expensive cycle of employing and training recruiters when talent demand increases and then letting them go when it dwindles. However, when your company partners with a contract recruiting firm, resources can be scaled up and down based on hiring demands. Professional recruiting services have the recruiters, expertise, and tech needed to support your company through shifting needs while remaining cost-effective. 


    Recruitment is important to a company's culture and success during a recession. But if you're like many HR and Talent Acquisition leaders, you understand how incredibly time-consuming the process can be. Recruitment isn't always top of mind during a recession, yet it's one of the most critical organizational functions. When you work with contract job recruiters, you get a team of experienced professionals that only focus on recruitment, giving you the time to focus on other strategic initiatives.

    Leverage hiring technology

    Talent technology keeps evolving constantly. The right contract recruitment agency will offer deep knowledge, expertise, and invocation, letting you leverage its existing technology to find better candidates, helping reduce time to fill, and enhancing the overall candidate experience. 

    Gain access to invaluable insights

    Recruiting firms apply a data-driven approach to talent acquisition. They empower you to make informed, proactive decisions, which are vital to successful workforce planning, especially during a downturn. They closely audit, track, and assess market data that could boost efficiencies, determine areas of improvement, and indicate fundamental changes in talent strategy.

    Looking for first-class contract recruiters? Reach out to TECLA to hand-pick your ideal sourcing team.

    Contract Recruiting Firm FAQs

    How can a company be recession-proof?

    Here are a few tips on how a business can be recession-proof: 

    • Ensure that your company’s liquidity is stable enough and your forecasted budget is sustainable to your business’s needs.
    • Lower startup costs and automate processes where possible.
    • Reassess hiring plans.
    • Capitalize on the gig economy, for example, by hiring contract workers.
    • Stay agile and be prepared for changes.

    Will the recession affect tech jobs?

    Yes. Tech companies globally are already restructuring their workforce, freezing hiring efforts, and rescinding employment offers due to the economic downturn. According to Layoffs. FYI,  tech startups have in 2022, laid off over 93,000 employees.

    Is tech hiring slowing down?

    Yes, even big-name tech companies and startups that are not cutting jobs are either rescinding offers, freezing, or slowing the hiring pace.

    For example, Microsoft Corp. in May revealed that it would reduce hiring in its Office, Windows, and Teams chat and conferencing software groups, noting a need to readjust staffing priorities as the company approaches a new fiscal year in a period of global economic uncertainty.

    In June, Coinbase, the cryptocurrency platform, announced that it'd extend the hiring freeze for both new and backfill positions and revoke some accepted offers. It attributed the decision to current market conditions and continuing business prioritization efforts- laying off roughly 18% of its workforce. 

    In September, Meta also announced it was implementing a hiring freeze and cautioned about more downsizing and restructuring.

    How is the tech job market?

    According to a report by The Dice Tech Job Report, the tech job market looked promising in the first half of 2022, with tech job postings growing compared to last year. But as of June 2022, the number of job postings started to decline.

    How does contract recruitment work at TECLA?

    With over 10+ years in the tech hiring scene, TECLA helps businesses augment their talent acquisition teams with their scalable on-demand recruiting approach. Their team of expert bilingual contract recruiters is based in 16+ countries in Latin America and offers an in-depth understanding of the market and job requirements. Every contract recruiter is internally trained on sourcing, selection, outreach, and screening. With the necessary skill set, they are ready to fully join and boost your in-hiring recruiting team, working as part of your company in less than two weeks.

    What is my expected lead time to fill a contract tech role? 

    The iCIMS 2021 Workforce report reveals that companies take roughly 61 days to fill a high-demand tech role, in comparison to 42 days for a non-tech role.  Working with a contract recruiting firm can help speed up the process. Companies like TECLA have candidates interview-ready in just a few days and onboarding on a new role in 2 weeks approximately. 

    Hire TECLA as your Contract Recruiter of Choice During the Downturn

    Tech startups are highly likely to fail during a recession, especially if they’re yet to be profitable and can’t get access to funding. But that doesn't have to be the case for your startup. Hiring contract workers helps cut costs and makes your business adaptable, bringing back some sense of predictability to your company and, in turn, helping you survive through the recession.

    Contract recruiters from TECLA are highly experienced, talented professionals that help augment your internal team on demand and for as long as needed. TECLA also understands that different job openings have different needs. Each contract recruiter's skill set is tuned to match the industry they'll work in. That's how they ensure a faster placement without compromising the quality of the talent. You can hire any type of recruiter, from a highly specialized tech recruiter to a generalist one, covering industries from finance, healthcare, hospitality, customer service, to name a few.

    Book a call today to learn more about how our contract recruitment services will help your business make it through the current economic downturn and take it to the next level.

    Gino Ferrand


    Gino Ferrand

    Gino Ferrand

    Gino is an expert in global recruitment having spent the last 10 years leading TECLA and helping world-class tech companies in the U.S. hire top talent in Latin America.

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