5 actions to help your employees manage economic uncertainty

Blog | June 1, 2023

Reading time: 4 min
Leadership through a recession

Be honest, transparent, supportive. And whatever you do, don’t call it a recession. That’s the prevailing advice from HR and business leaders in this era of turbulent economics.

Try to veer away from the “L” word — layoffs — too, they say.

Throughout 2022, just as in 2019, companies were scrambling for workers. But today, even with surprisingly robust jobs reports, global economic uncertainty has brought tens of thousands of layoffs to the tech sector, with additional cuts bleeding into industries such as banking, automotive, and entertainment.

If you feel uncomfortable about a cloudy business forecast, imagine how your workforce feels. Weary from a pandemic, shortages and supply-chain snafus, food and fuel price hikes, and an enduring war in Europe, employees are dizzy from the rollercoaster ride that’s defining this decade.

Foster resiliency in your business from the inside out

It’s possible 2023 will not bring about more than a modest downturn. But whatever happens, and whatever words are used to identify it, a bumpy ride lies ahead. Here’s how to help manage employees’ fears — and foster a culture of resilience.

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1. Be transparent

Acknowledge that the global economic situation is uncertain and challenging for everyone. No need to open your books to everyone, but providing context for how financial pressures impact business is always a good idea.

If returns are solid, say so. Or, be honest about any difficult times ahead. Then, share leadership’s plan for managing disruptions, cutting costs or product offerings, expanding or diversifying products, or even moving into new markets.

You do have a plan, don’t you?

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2. Emphasize the long-term

Express the importance of resilience and adaptability during challenging times and reiterate your commitment to the long-term success of your business. Let employees and customers know you’ll do everything possible to maintain the quality of your products or services.

“Now is a good time for “going back to the basics and locking in on your mission and vision,” says Sunil Rajasekar, Billtrust CEO.

“You want to make sure that you, as a leader, and your entire company, are locked in on the mission and the vision. That’s really important. The lessons learned from being part of several recessions is to make sure you’re sticking to the basics, you have good discipline, you’re staying focused on your mission, your vision, and you don’t lose sight of that.”

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3. Value all your people — employees and customers

Faced with cash crunches or falling profits, it’s easy to forget the people behind the numbers. Too often, salaries become line items — easily slashed numbers — rather than recognizing the value of experience and knowledge beyond pay and benefits.

You can’t promise that layoffs won’t ever occur. But don’t be flippant about rumors. Just be honest and explain how your company is working to ensure adaptability to all economic pressures.

Above all, remind your people that the company couldn’t exist or scale without them.

Equally important is to remind employees that their customers feel the same uncertainty. Credit and collections and sales and marketing departments can help customers feel like any downturn is more manageable with an “all in this together” mindset.

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4. Help employees manage what they can control

Just as your company has developed a “response plan” for today’s economic highs and lows, help employees establish their own plans for weathering economic climate change.

  • Promote cross-training and alternative work arrangements. It’s cheaper to redeploy people than to recruit and train new talent. Backfilling vacant jobs with experienced employees shows your commitment to their lives and futures. Flex-work or job-sharing options are another way to help your staff maintain income and job security while reducing operating costs.
  • Encourage savings plans. You’re focused on keeping cash on hand, and so should your employees.
  • Offer financial education resources, such as workshops or webinars, to help employees better understand money management in an economic downturn.
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5. Reevaluate employee benefits

Some perks, like Uber rides to the office and unlimited canisters of dry cereal, can easily be nixed from the budget with little pushback. But you might consider extending some new benefits if you don’t already have them, such as financial planning services and employee assistance programs (EAPs) to help your people emotionally cope with financial stress and uncertainty.

Employee engagement matters, and it costs very little. Your open and transparent communications about plans and strategies will help keep employees focused on your long-term goals rather than any short-term economic strife.