A recession in the developed world is nothing new. In fact, since 1900, there have been 23 in the US and nine in the UK – as well as four fully global recessions since the end of World War Two.
But the challenges the recession brings are new for most people in HR leadership roles. Crucially, understanding how a recession will affect your company, your people, and how you manage them, gives you the best chance of mitigating the worst of it.
Everybody reacts differently, but there are a few things that will apply to most of your workforce. They’ll all be worried about whether they’re still going to have a job, for example – which can seriously impact their performance.
Here, employee wellbeing, engagement and performance all have important roles to play.
Employee wellbeing
Employee wellbeing is about more than just how happy someone is; it’s about finding the right balance between investing in people and expecting things in return. The recipe is simple: healthy employees = healthy business.
And that formula should never change – especially in challenging times.
Managers, leaders, and HR have an almost moral responsibility to look after their employees, and to have clear strategies for managing them in any political or economic climate. If external factors are making employees more anxious about the future, your focus on wellbeing needs to increase further – not diminish.
Employee engagement
Employee engagement affects just about every aspect of your business, including profitability, revenue, customer experience, employee turnover and wellbeing. It creates better ways of working and enables better management, so your people are happier and more productive – leading to better morale, more satisfied customers, higher quality products, lower employee turnover and absence, and higher profits.
In a recession, it matters more than ever that what you promised your people
isn’t forgotten. Reversing or reneging on commitments will undermine their faith in you, your culture, and your brand.
Employee performance
Employee performance is your lifesaver in times of crisis. While measuring productivity is important, understanding performance is even more so when it comes to keeping your people central to planning through tough times.
The recipe is simple once again: engaged employees = performing business.
So, what?
Employee wellbeing, engagement and performance are all connected – and there’s an impact on the bottom line to consider. Look after your people and their wellbeing in a recession, and you can keep them more engaged and performing at higher levels.
When your employees are thriving, they take fewer sick days, deliver more, and have lower rates of turnover and burnout. Equally, when your employees suffer, so does your organisation’s bottom line.
The temptation might be to see your people and the support you’re providing them as costs to be cut. But, if you concentrate as much – if not more – on them during the tough times, you’ll be rewarded.
As you might expect, companies whose employees are highly engaged before a recession are often better equipped to weather the storm. Their people already feel connected to a clear purpose, and are happier to go the extra mile and put in some discretionary effort for an employer they believe is invested in them. They pull together and roll up their sleeves even more.
Only by building resilience and putting communication and goal setting at the heart of your response will your organisation be ready to navigate these fast-approaching choppy waters.
This article contains a snippet from our brand-new eBook, Employee Engagement in Challenging Times. In the eBook, we cover how to help your people navigate the looming recession and cost-of-living crisis, how to measure and track employee engagement at your organisation, and how to justify an employee experience budget to decision-makers when purse strings are tightening.