Strategic Human Resource Management

Section One

Countercyclical Hiring

In addition to not laying off as many employees as technical
production requirements might suggest, companies may pursue
countercyclical hiring strategies of hiring a limited number of
managers and professionals during economic downturns. In
essence, companies would be stockpiling a limited number of
high-quality key personnel for future use in pursuing strategies
requiring certain personnel capabilities. As opposed to
economic upturns when competitors are also attempting to
obtain the same personnel, bargains in quality can be obtained
during downturns. Several other benefits may result from
countercyclical hiring. One benefit might be a more regular age
distribution, which is lacking the spikes or troughs that occur
with discontinuous hiring. As a result of dramatically increased
health insurance costs, age distributions have become a
concern to employers that have disproportionate numbers of
older workforces. Aside from the benefits of counter-cyclical
hiring, there are obvious costs, such as hiring employees when
they are not needed and equity issues with the current
workforce. There also are several implementation issues such
as the ability to forecast future human resource demand
accurately enough to pursue such a strategy.^110 Empirical
studies of countercyclical hiring indicate that successful
companies employ systematic approaches toward human