At a time when companies all over the world are thinking only about a hiring freeze and layoffs, some HR gurus are going off the beaten track. They are advising managements to use the downturn to find the talent who can take the organisation to the next level: People whom you wanted to hire all along but couldn't afford due to skyrocketing salaries in the past few years.

Perhaps the best example of the opportunity coming your way to acquire the best talent at a reasonable cost is the experience faced by students at India's premier engineering institutes.

Several multinational companies withdrew the job offers they had given to students of IIT Bombay, Kharagpur and Delhi - a far cry from the days when the IIT and IIM students used to interview companies to figure out whether the latter was prepared enough to "do justice" to their talent.

Some HR experts are, however, asking managements to be wary of hiring candidates for far less than their skills are worth on the open market. For, when the economy turns around, these candidates will be the first ones to feel short-changed.

Thus, what was once a "great deal" can quickly become a costly mistake. So, be reasonable with your salary offers. The bottom line, experts say, is that good companies never let people feel small when the bargaining power is with the managements.

It's obvious that the slowdown will soften your hiring budget, but head-hunters say this is the time when strategic hiring takes over. For example, this may be the right time to hire talent who can manage the slowdown and help you through the hard times.

At a time when cost efficiency is the key, managements must be sure they are cutting the right things and investing in the right things. After all, the economic downturn shouldn't cripple your ability to manage your company's future growth.

An HR consultant says this is important. The past few years of heady growth means that most people at the senior management level in Indian companies are used to vigorous expansion, ambitious projects and taking major risks. Even bad decisions didn't hurt because of the strong economic growth.

The current situation is vastly different and you suddenly need people who can not only manage future growth, but can also manage a slowdown, the consultant says. He doesn't want to be identified as he has too many clients in this category.

Yasho Verma, HR director at LG, says the irrational optimism in the past few years shouldn't give way to irrational pessimism. He quotes a recent Harvard Business Review study which says that the first thing companies do during a slowdown is to stop hiring, start issuing pink slips, cut promotion budgets and freeze expansion plans. But such knee-jerk reactions may often boomerang.

For, a slowdown when expectations are much more realistic may just be the right time to build your business. LG, for example, has kept its hiring plans intact - it has recruited 90-95 candidates from the B-schools this year which is more than the past few years. The increments (LG gives increments in January) will also be maintained at last year's average level of 15 to 16 per cent.

Verma remembers the time when LG India's Korean parent was in deep trouble in 1997 following the Asian economic crisis. "Many thought the company would put off its India entry plans, but the company stuck to the original schedule and look where we are today," he says.

Microsoft, for example, hasn't got swayed by the current slowdown to join the layoff or hiring freeze bandwagon. The software giant has more than 91,000 employees worldwide, including more than 54,000 in the US and has seldom had layoffs or slowed down hiring in its more-than-30-year history.

Reacting to speculation over layoffs because of the current slowdown, Microsoft says it will need to be careful but will add thousands of new jobs this year as it "plans to grow".

Even former GE boss Jack Welch (famous for his rank-and-yank theory under which 10 per cent of a company's employees must be compulsorily sacked every year) has spoken against the panic-firing by some leading companies.

Speaking at a seminar recently, Welch said companies should be working to keep up the morale and motivation of its employees, particularly the top performers. He denounced across-the-board pay freezes that some companies have instituted in the downturn. "It's nuts to give everyone a pay freeze," Welch said.

Great companies also understand that large-scale layoffs or an across-the-board pay freeze can dramatically weaken their employment brand and external image. Even people who are paid well will walk out of the door the moment there is an upturn. The reason is simple: no one expects even the government to be a benevolent employer any more. But a ruthless employer is asking for trouble in the long term.