Whether we’re prepared for it or not, a potential recession is headed our way, and successful companies are cutting headcount.
If the economy does head into a recession, this one will look a little different than the last few. The unemployment rate is at an all-time low of 3.7%. Companies are not only struggling to find new employees, but they’re having trouble maintaining the ones they already have.
Ensuring that your team is engaged and passionate about their work is no easy feat, especially during a recession. However, it’s critical.
Your employees keep your company afloat through economic hardship. With that said, keeping your employees around is the key to holding your company together.
The Importance of Retention During a Recession
Employees are more confident than usual, considering they’re well aware of today’s shortage of workers. As of now, there are still nearly two jobs for every job seeker, meaning employee confidence is coming from a genuine place.
Workers know they have other job options if they’re unhappy with their current position, so the majority aren’t keen on sacrificing their personal lives. They’ll go on the hunt for another job that suits them better for the time being.
Whether or not we experience a recession, the extremely tight labor market isn’t going anywhere anytime soon. With this in mind, employers must focus on retaining their employees, especially their top talent.
Retaining Top Talent in a Recession
A recession triggers a slew of retention challenges for employers; however, it offers some opportunities as well. If you’re able to show your team that you genuinely value and care about them, you can earn their loyalty.
Better yet, most of these solutions are extremely low cost, so you can prioritize retention regardless of growth rate or budget.
1.Make Recognition a Priority
A great way to reduce turnover rates is to regularly acknowledge your employees and showcase your appreciation for the hard work they do. A single compliment can go a long way. In fact, it can boost their confidence and motivate them to perform even better at work.
From one peer to another, to a direct report, recognition comes in many forms. It’s important to consider that recognition doesn’t just happen on its own. As an employer, you need to build a culture that prioritizes employee appreciation and recognition.
A culture of recognition begins with your company’s senior leadership team. They should increase how much recognition they give to their employees and reports. Even a thank-you email could make all the difference.
Create an environment where it’s easy for employees to recognize their coworkers’ achievements. At every meeting, applaud weekly accomplishments to enable recognition for any one of your employees.
2. Encourage Empathy
It’s no secret that recessions are both mentally and emotionally challenging for workers, regardless of their job security. They may be worrying about family or friends who are struggling to make ends meet, or perhaps they’re feeling anxious about the future.
Understanding your employee’s worries and stresses can help you develop ways to help them through such challenging times. Try out wellness programs or communicate about benefits that can help your team.
Practice having better and more effective conversations with your employees to ensure they’re doing okay during a recession. Avoiding difficult conversations isn’t the right way to go. Instead, make an effort to have these conversations.
When your employees don’t feel understood by their leaders, they’re at a much higher turnover risk. That said, they’ll seek out a company that proactively shows interest in their well-being.
3. Improve Internal Communication
Employee retention is directly affected by communication and transparency. Employees who see their leaders as transparent report more than six times higher satisfaction with their workplace environment.
Allow your company to adopt frequent, clear internal communication. Employees are interested in hearing from their leaders when things get rocky, so practicing an internal communications strategy is vital.
4. Keep Meaningful Perks and Benefits
The benefits of your company aren’t solely for rewarding your employees during a prosperous economy – they’re just as important during the tougher economic spells. For most business owners, there’s a sudden urge to cut benefits when a recession hits.
While you don’t need to keep every one of your company’s perks, indiscriminately cutting them may make your company less susceptible to success down the road. To know which benefits your employees value the most, ask them!
Obtaining their direct feedback will help you make the best decision for your team.
Key Takeaways
Take some time to reassess your current employee retention strategies. Regardless of the size of your business, maintaining top talent during a recession is critical for future success.
Focus on building a positive workplace culture that prioritizes employee retention. That way, your company is prepared to face the effects of a possible retention.
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Pincus Schiff is a payroll software specialist at Friday App, where he helps businesses simplify payroll, stay compliant, and automate their workflows. He writes about payroll best practices, compliance, and the latest in workforce technology.
