When markets slow, many businesses instinctively pull back: hiring freezes, training cuts, and a general pause on talent investment. While this may balance the books in the short term, history has shown us, (again and again) that failing to plan for the rebound can leave companies scrambling when the tide turns.
A clear example of this comes from the mortgage sector. After the 2008 financial crash, demand for underwriters dropped dramatically. With lending volumes in freefall and widespread economic uncertainty, banks and lenders halted recruitment and cut back on training. For several years, very few new underwriters entered the profession, and existing talent either left the sector or progressed without mentoring a new generation.
So, when the market began to recover, lenders found themselves in a bind: lending had returned, but the underwriter talent pool had not. The shortage led to processing delays, increased costs, and missed opportunities for growth. It took years to rebuild the lost capacity.
Then, history repeated itself, this time in the wake of COVID-19.
At the onset of the pandemic in early 2020, much of the lending market paused again. Initially, uncertainty led to conservative hiring strategies and, once again, a slowdown in recruitment and training across underwriting teams. But this time, the rebound came faster and harder.
By late 2020 and into early 2021, government support schemes, a post-lockdown property boom, and historically low interest rates led to an unexpected surge in mortgage activity. Lenders faced record volumes of applications, but many were still operating with reduced or stretched underwriting teams. Just as in 2008, the shortage of skilled underwriters caused bottlenecks, extended time-to-offer, and operational stress across the sector.
Despite the lessons from a decade earlier, the industry had once again been caught unprepared, again highlighting how easily short-sighted hiring decisions can come back to bite.
And this isn't unique to underwriting or even to financial services. Across a range of sectors from engineering, data science, healthcare, logistics, and beyond, organisations have faced similar challenges. When the demand for niche skills returns, those who cut too deep during slow periods often find themselves unable to respond quickly, giving an advantage to competitors who kept investing in people, even in lean times.
Specialist talent takes time to develop. Training pipelines, mentorship, and knowledge transfer can’t be fast-tracked overnight. Which is why organisations must think long-term when managing workforce planning.
The bottom line? Don’t just prepare for the slowdown—prepare for the rebound, too.