Mar 10, 2020
Recessions can be sudden and one day you could walk into work and suddenly you just notice a slow down. This could mean that a recession is happening. In today’s Monday Morning Memo, Wilson and Samantha go over what staffing and recruiting companies need to do during a recession to ensure that you can weather the storm and come out the other side on top.
Telltale Signs That a Recession Is Happening
One of the things that Wilson touched on regarding recessions are the telltale signs that one could be happening right now. These include a dramatic increase in back door hires, your best debtors are running behind, and your less than wonderful debtors start trying to conserve cash by stretching out their payments. As of the writing of this article none of these signs have shown themselves yet. With that being said, there is still time to prepare a checklist to ensure that you can weather the storm of a recession.
Wilson’s Recession Checklist
Now that you know the telltale signs that we might be in a recession, now you have to know what you need to do during the recession. Wilson explained from his viewpoint what you need to do to survive and even thrive during a recession.
You Need a Way To Track Your Candidates
Being able to track your candidates puts you in a strong position to also find back door hires. One of the things you’re going to see during a recession is not only the huge surge in backdoor hires, but also a large surge of employees getting laid off before you can find them. This makes it important to be able to find them before that happens.
Maintain and Set Credit Lines
Most of our clients tend to extend their credit lines based on what their clients need. Avoid doing this as some clients can be a wonderful $5000 credit risk but a horrible $50000 credit risk. Check your client’s credit and set your credit lines based on their creditworthiness.
Have a System To Follow Up With Past Due Clients
The next thing on the checklist is making sure that you have a way to follow up on past due clients. You want to remind your clients that they owe you debt. A great example is having an automated three phase email that will be sent to debtors that are overdue. Make sure that this system is automated and not people dependent as well.
Samantha’s Recession Checklist
Samantha also has her own recession checklist. From a legal standpoint, she shared that everything that you used to do is far more important during this time.
Have You Documentation In Order
Having the right documentation during a recession is all the more important. Make sure that you have a signed contract. Also look into getting a personal guarantee as it gives you that little bit of extra protection.
Know Who You’re Dealing With
One of the things that can happen during a recession is corporations could simply shut down and reopen. If one of these corporations is your debtor and they reopen their doors after the recession, you need to make sure you know who exactly you’re dealing with.
Quotes
- We see a huge surge in backdoor hires. I mean just off the Richter scale. If we're getting five backdoor hires a week we walk in and we're seeing 20 in a week. I mean it's literally a 3 to 400% increase.
- Finding one or two backdoor hires during a recession could mean twenty-five to fifty thousand dollars to you which could help absorb any shrinkage that you see or at least get a cash injection to ride out the storm
- If they can put a hundred thousand dollars of their payroll over on your staffing that's great that's a new client for you, but understand you're now exposed.
- The primary reason that corporations exist is to shield individuals from personal liability. If you have a debt ridden company they can shut that down, open up a new corporation and not owe you a dime without a personal guarantee