Recession crawling: hire for performance or potential?

One of the key questions this year is whether we are in a recession or will be there soon. While news gives sometimes more and sometimes less optimistic views, analysis of economic indicators that Forbes performed suggests that the US economy is drifting towards recession. During economic downturns, companies experience more volatile and reduced demand that puts pressure on revenue and slows down R&D and overall growth. They need to find solutions that will lead them out of this situation.

With high pressure from the market and limited resources that can be invested in growth, the question is where to invest: shall we hire for performance or potential? A recession is a situation of crisis and the natural tendency would be to go for a performance ensuring fast results and quick turnaround. Proven experts bring knowledge and experience that enables them to take decisions confidently and act. They know how to attract new clients or how to develop products for the market. However, we usually forget that these skills and expertise were gained in certain environments and under conditions. During a recession business environment may change significantly, leading to the lower effectiveness of previous experience down to the levels where such experience is not effective at all.

The alternative is to hire for potential. This means hiring people whose expertise is not fully in line with expectations for the specific role or task, but there is a clear desire to learn and close the initial expertise gap. The advantage of hiring for potential is that person can acquire knowledge in an actual environment where knowledge will be applied and there is no need to ?unlearn“ previously acquired skills. However, the issue with this solution is that upskilling takes time, which is a scarce resource during the recession and results are expected much sooner than the skills gap is closed.

What is the solution then? Change in economic conditions pushes companies to innovate or at least find alternative ways of doing business. HRB finds that success depends on the ability to play both defensively and offensively: using operational efficiency to gain savings that will be invested in new businesses. To succeed on that path, hires that bring new views on existing problems and possess a growth mindset will be in a position to create the strongest impact. They can challenge status quo and ensure fast change, while learning on their way. Additionally, change brings stress to both people and organizations, and successful navigation requires personal stability and managing fears and concerns of other people.

Should you hire for performance or potential, then? Neither. Hire for innovation and learning mindset, coupled with resiliency and empathy.