With record inflation, a global recession, and headline-making waves of recessions, it’s no surprise that HR teams across the globe are worried about employee engagement and retention. As a critical strategy for maintaining (or even improving) your company’s culture through tumultuous economic swings, doubling down on employee feedback is more important than ever.
This article explores how trust, transparency, and open communication with your people during a recession are fundamental for positive business outcomes. We’ll also review ways to help alleviate the financial—and emotional—stress economic downturns place on everyone.
The challenge of employee engagement in difficult times
You’re not alone if your office has felt a little tense in the past several months. There are many factors piling stress onto the workforce: a record drop in household income, an unsteady economy, and layoffs of hundreds of thousands from some of the largest companies in the world. Together, these major concerns can cause intense anxiety in people concerned with maintaining their livelihoods.
Fear and uncertainty can also cause people to disengage from work, reducing the employee engagement that is ever-so-important for productivity. Meanwhile, concerned people may be hyper-aware of every perceived cost-cutting measure, looking for cues that indicate it may be time to jump ship and look for work elsewhere to get ahead of possible layoffs. All of this can significantly impact company culture as people’s fears and disengagement spread through the office.
Transparency: the key to employee retention
It may be tempting to clam up about your company’s challenges to avoid panic. But silence and secrecy exacerbate anxiety and can have an even more significant impact on company culture and employee retention.
This is why it’s so essential to trust in transparency and open communication. Simply being open with your people is key to easing fears and boosting people’s confidence in their job security and financial stability. Listen to their needs and concerns, then act on them quickly. Here are some things HR teams can do to manage stress and alleviate the financial burden.
Practice transparent communication
Company cultures of openness and transparency start from the top. Even though your organization may have to make hard decisions, it’s critical to work with everyone—from the C-suite to line managers and individual contributors—to remain transparent every step of the way. Honest and open communication builds trust, appreciation, and loyalty, ultimately boosting productivity, retention, and engagement.
In addition to regularly offering updates about the company’s financial health, initiatives, goals, and KPIs, HR can encourage managers to practice daily transparency with their direct reports and teams.
Leverage employee surveys
It may be difficult for people to voice concerns and fears openly. Anonymous surveys are a great way to encourage people to express their honest opinions, especially since many people feel much more comfortable voicing the full extent of their worries and feelings through anonymous forums.
Commit to frequent one-on-one meetings with team members
A people-first organization must strive to demonstrate a high level of empathy in times of economic downturn. Be sure to give your managers the resources and time they need to hold frequent one-on-ones with their people. The more people talk, the more trust and ease they will feel.
It’s best practice to have one-on-one meetings at least once or twice a week. Additionally, weekly team meetings and monthly all-hands can help maintain consistent communications, keeping people in the loop about challenges, budget cuts, and the reasoning behind them.
Consider ways to relieve financial stress directly
While it may not be accessible to all organizations, those who can are encouraged to consider merit increases, matching salaries to market levels, or offering one-off cost-of-living payments (which may be more cost-effective).
As reported in Management Today, “To help cushion the blow, HSBC has announced it will give around 99.5% of its workforce (4,182 employees) a one-off payment of £1,500. It follows in the footsteps of Virgin Money whose workers on £50,000 or less will receive an extra £1,000 in their August pay packet.” This aims to alleviate financial pressure to improve wellbeing.
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Get creative about relieving financial stress
If directly relieving financial burdens through payments and salary increases isn’t an option, there are other, less costly ways to help your people, build loyalty, and promote trust—all while keeping your business fiscally fit. Some of these options include:
- Offering financial coaching
- Giving low-interest loans or advance payments
- Giving training sessions on how people can tap into their full suite of benefits
Other less-costly benefits can significantly impact your people’s wellbeing, too. These include:
- Providing breakfast or lunch on-site to offset the burden of rising food prices
- Offering hybrid work or other flexible work arrangements to offset the cost of commuting (or commute/transportation subsidies to offset the rising costs of energy)
- Upskilling, reskilling, and promoting people to give a more definite sense of job security and value to the company
To get a clear picture of what strategies can work best for your organization, talk to your people about what would work best for them. Get their feedback on which benefits can realistically help, and save money by investing only in benefits and perks your people will actually use and appreciate.
Wrapping it up
Times are hard enough as is. The last thing your organization needs is for panicked people to disengage from their work or jump ship. Maintaining employee engagement and retention during a recession is crucial for a company’s success.
HR teams can boost morale by being transparent, listening to employee feedback, and finding ways to alleviate financial stress. Companies can weather difficult times and emerge stronger by prioritizing employee feedback and taking proactive steps to actively support your people’s wellbeing.