The current economic turmoil presents one of the biggest challenges the HR community has faced for a generation. Meeting the short- and long-term needs of a business and its staff represents a delicate balancing act.

The bottom line may demand job cuts, but will that leave a company without the skills and experience it needs in these challenging times? And would companies be better off, in fact, investing in more staff, with a specific view to riding out the recession? These are some of the questions answered by Recessional Recruiting, a report commissioned by online recruiter Jobsite.co.uk.

According to the HR community, what is the outlook for UK plc in this downturn? More than half (55%) HR managers are concerned about the effect of the recession on their company, with 25% worried that their business may collapse. Two-fifths (41%) have reservations about retaining staff, while a quarter (26%) are worried about being able to take on new recruits.

However, some are more confident, with 37% thinking their firm is robust enough to weather the storm and 21% claiming that they will actually grow during the recession.

All markets rely on confidence and the jobs market is no exception. With the news dominated by large-scale redundancy announcements, it would seem that market confidence is pretty low. Yet there seems to be positivity among employees about the buoyancy of the jobs market and job security, with nearly a fifth (18%) claiming to be confident and a further 7% ‘very confident’.

More than half the workforce (52%) are looking for a new position, with only 16% doing so because of redundancy. The remaining 36% are job hunting to pursue their career ambitions, undaunted by the downturn - good news for HR managers who are looking to recruit.

And surprisingly one in three firms (36%) have not changed their recruitment strategy despite the recession. Of those firms that have changed their approach, the common responses are to:

• only take on critical hires
• become more risk-averse with hires
• freeze recruitment
• no longer hire people in managerial positions.

Research reveals that although there is a recruitment slowdown, it is not as big as might be expected. Just over half of firms (53%) are still hiring, which reflects the proportion of the workforce looking for a new job (see above), and the majority of hires (80%) are permanent, full-time staff.

The most popular recruitment needs are for admin staff (33% of firms looking to hire), middle management (29%) and graduate entries (27%), with staff such as IT support (14%) and skilled manual workers (13%) the hardest to find.

For those companies looking for staff, it’s likely they’ll get a quality recruit for less than they would have in pre-recession times, as candidates have adopted a more flexible approach, with nearly 8% admitting they would reduce their salary expectations.

Nevertheless, 47% of firms aren’t recruiting, with just over half (53%) bringing in recruitment freezes. Unsurprisingly, the automotive (40%), construction (32%) and hospitality (20%) sectors are the worst hit. In addition, 13% of charities, 25% of media, sales and publishing organisations and 13% of telecoms firms have also put their recruitment on hold.

A recruitment freeze still needs careful attention to prevent any negative impact on staff. Research reveals that the biggest concern in the HR community is that freezing recruitment will hit staff morale (38%). Many HR staff are concerned that a freeze could leave them top heavy (13%) or affect their company’s growth (22%), productivity (16%) or performance (15%), which could have a serious long-term effect, especially when coming out of the recession.

Unfortunately, one in four firms (23%) have been forced to restructure, with a fifth (20%) letting staff go. This looks set to rise, with 41% of HR managers having concerns about being able to retain staff.

An alternative to a freeze or restructure is to actually take on more staff, investing in critical hires, with a specific remit to helping a company get through tough times. One in 10 companies is currently hiring staff to help them ride out the recession, with another one in seven (14%) considering taking on recession-busting staff. The top hires are sales managers, new business staff and office managers. Such hires could better position a company for more rapid recovery once the economy starts to improve.

For many firms, the skills and expertise of their staff is their only resource and by managing staffing with care and intelligence, more businesses will ensure they are equipped to ride out the recession - and be best placed to take advantage of the green shoots of recovery when they inevitably spring up.

• Recessional Recruiting is a report commissioned by online recruiter Jobsite.co.uk based on views of more than 4,000 employees and 500 HR managers from companies of different sizes.