We don’t want to ring any alarms and raise your anxiety levels further but when there are more and more talks and signs about an upcoming recession. With an unstable economy and inflation slowly creeping up, questions regarding your security at the workplace might arise. A study conducted by Insight Global earlier this year showed that nearly four out of five American workers (78%) are worried that they might get laid off during the next recession. Some other findings include that 56% of American workers pointed out that they aren’t financially prepared or aren’t fully sure how to prepare for a recession should the economy enter one.
While this survey gives only a glimpse of information, the solid fact is that the next recession is more than a “when”, rather than an “if”. The good news is that we are currently not in a recession and we have time to get a better understanding which should ensure our job and financial security when things eventually go south. We are going to review the potential perils of a recession from a business’s point of view, but that doesn’t mean it won’t be helpful for employees. So, as always, grab your preferred drink of choice, and let’s plunge right in.
Retaining employees during a recession
Remember the good ‘ol pandemic in 2020? COVID-19 put extreme pressure on businesses and a lot of them had to make difficult decisions. A lot of companies cut off working hours and, as a last resort, laid off employees in order to stay afloat during the troublesome times of the pandemic. While it’s not the same, a recession can put similar pressure on businesses and managers will have to make some tough calls.
Retaining your employees during normal circumstances is a feat in itself but doing that during a recession is a whole different ball game. When the world is going through an economic downturn your employees might be more likely to abandon ship and look for other opportunities which might offer a better sense of security in terms of career and finance. Adapting your retention strategy for the period of recession is crucial. So here are some tips on how you could do that.
Make them feel secure
If your employees feel safe about their current position, they will be less likely to leave it. You can offer your employees guaranteed working hours, salary protection, or even bonuses to stay in your company.
Be open and communicate
By upholding information regarding your future decisions on how you will tackle the situation, you make people even more anxious. Hold meetings and talk with leaders from across all levels to make sure everyone is in sync with your future plans and decisions. If you are transparent about the situation, employees are more likely to stick with you.
Lead with courage
When things go south, leadership is everything. If you manage to properly lead your business during an economic crisis, your workforce won’t abandon you ‘till the end. Although a bit stale, these ten action steps, written by Gregory P. Smith during the 2008/2009 recession, are still very much valid.
Gaps between companies and employees
Trust is the foundation of every relationship, without it any communication is bound to crumble. The same survey by insight Global, cited a tad earlier, showed that should a recession happen, nearly half of the employees (47%) don’t trust their employer would properly execute their recession plans, and two-thirds of managers don’t believe that senior leadership would convey its plans. However roughly the same amount of managers and non-managers trust leadership with navigating them successfully through the storm. So despite the majority of workers are thinking that the company wouldn’t be able to communicate and execute its recession plans, they still believe that it will be able to get them through the recession.
A way of increasing the trust of your employees is to be as transparent as possible with your plans on how you’re going to handle the situation during a recession. Forming a recession plan and sharing it with everyone isn’t easy but it’s a nice starting point.
How to respond to questions concerning job security
With the looming option of being potentially laid off, anxieties and insecurities are sure to arise in employees, no matter the seniority of the position. From C-level to Junior – stress gets to everyone and all are bound to experience some form of negative emotion. Which in turn affects the overall morale. During recession employers also have to make sure that it doesn’t hit rock bottom. As with many things, there isn’t a simple universal guide on how to keep the morale at your company high, during a recession. However, there are a few guidelines that can help out. Here are five steps that you can consider when formulating a strategy on how to maintain healthy levels of morale in the company.
- Make use of employee engagement data – by conducting regular surveys among your employees, you will get a sense of the pulse of the company. Making sure to understand how employees feel, in general, not only in times of crisis, is necessary in order to increase company morale.
- Plan and provide growth opportunities – during times of economic downfall, money is often tight and raises and promotions become rare. Motivate your employees by planning and providing growth opportunities, which aspire to their personal career aspirations.
- Schedule team-building activities – bonding as a team is always a good idea, especially during bumpy roads. Stress can have a significant effect on morale, but a simple game of Charades, after work on a Friday can do wonders.
- Be empathetic – everybody is dealing with daily stress factors. By putting yourself in the shoes of your employees, you can get a better understanding of them. That eventually will build trust and will create opportunities for them to share things that bother them. Be present and listen.
- Give recognition – make sure to appreciate your employees whenever there’s an opportunity to do so. Encouraging positive behavior will only lead to more positive behavior. On top of that, giving credit where credit’s due will build more meaningful relationships.
In summary, kindness, empathy, and honesty are powerful tools when it comes to communication. KEH isn’t a good acronym but if it will help you to remember those three, then by all means use it. The next time an employee comes to you with a difficult question or you notice a colleague who is in a rough patch and you want to help them – just lead with KEH and everything should be alright.
A recession is no doubt a tough time for businesses, however, it doesn’t mean it’s the end of the world for your company. Planning and effort are key when handling difficult situations. Make sure to understand what your employees want and need, and you’ll be in a much better position to keep them when things go south. If you are posed with taking hard decisions, be sure to carry them out in a way that doesn’t damage the company’s morale and reputation.