4 Strategies To Support Employees During Economic Uncertainty
“The value of a business is a function of how well the financial capital and the intellectual capital are managed by the human capital. You’d better get the human capital part right.”
– Dave Bookbinder
The recession is like a wild rollercoaster ride – full of twists, turns, and hair-raising drops that can leave even the bravest souls feeling jittery and uneasy. And unfortunately, when the economy takes a dive, organizations respond by hitting the “eject” button and laying off employees, hoping to cut costs, adjust structures and ride out the storm. While handing out pink slips is as easy as distributing Halloween candy, it’s important to consider the long-term consequences of downsizing.
According to research published on Science Direct, downsizing can lead to a host of issues, including the loss of expertise, decreased productivity, increased workload stress on remaining employees, and a lack of trust in management that can result in disloyal employees – eventually increasing the likelihood of bankruptcy.
While tough times aren’t easy on anyone, it’s critical for leaders to think about how to provide their employees with a sense of stability and positivity for the future and retain top talent, given that it costs 6 to 9 months’ salary on average every time a business replaces a salaried employee.
So, here are 4 ways for organizations to prioritize employees during an economic downturn:
- Remote or flexible work schedules: While the pandemic may have sparked the remote work revolution, some organizations remain hesitant to embrace flexible schedules due to concerns about visibility. However, McKinsey and Company reported that a remote working arrangement is now the third priority amongst job seekers in a job marketplace, following better pay and career advancement opportunities. So, it’s important for companies to adapt to this changing landscape by evaluating employees based on the quality of their work rather than the number of hours worked.
- Enhanced benefits: According to the “2018 AICPA Employee Benefits Report”, 80% of Americans said that they preferred a job with benefits over a job that offered 30 percent more salary with no benefits. So, organizations should consider options like offering a stake in the company and providing mental health benefits, health insurance, or financial bonuses to retain a motivated and loyal workforce.
- Job security: In times of economic uncertainty, employees worry about losing their jobs; organizations can ease their anxiety and boost their morale by fostering a positive and supportive work environment by expressing gratitude, investing in their growth, recognizing their accomplishments, and rewarding their loyalty with retention bonuses to make them feel valued and confident in their roles.
- Communication and transparency: During times of recession, employees actively seek reassurance, making the implementation of a robust internal communication strategy crucial. It’s important to note that transparency doesn’t necessitate disclosing every detail but rather involves proactively communicating priorities and the company’s vision. This approach fosters trust among the workforce, leading to increased retention rates.
In times of recession, it is essential to prioritize employee satisfaction and tailor benefits packages to their needs. Transparent communication, open dialogue, and compassionate support are crucial for maintaining morale and reducing anxiety. Investing in leadership development and providing clear direction instill confidence in the workforce. By taking these proactive measures, businesses can weather the storm, retain top talent, and navigate the complexities of a recession with resilience and success.