After a hugely difficult economic year in 2022, a recession is still likely this year.
As an employer, navigating a recession can be difficult, but there are steps you can take to help your business weather the storm.
So, what can you do?
Evaluate your financial situation
Naturally, one of the most vital steps in an economic recession is to consider how you can protect, or negate the adverse impact on, your finances.
You need to know what the core functions of your business are that are needed to function during the recession, keep these intact, and potentially cut down spending in other areas that is not essential.
This way, you can cut costs down while ensuring the main facets of your business are intact, and you can continue to perform. You may also have to evaluate which functions of the business are given priority during the recession. For example, sales may take priority as it has a direct correlation with increased business and cashflow, therefore helping to alleviate the financial hits that may be taken in other areas.
Conducting a skills-audit of your existing workforce is a good way to assist succession planning. Through these audits, you are able to determine particular traits in your employees – such as leadership skills – which can help you to evaluate how employees and teams can be restructured in the future. Or, these audits can reveal any gaps in your employees’ skills, so that you can determine where to strengthen, and set your workforce up for success in the long-term.
Other routes, such as implementing a recruitment freeze, are decisions that can be made in order to protect the economic side of the business during a recession.
Increase the focus on your employees
Employers need to be even more employee-centric during a recession. Many of them will be hit hard personally by the recession, and impacts are likely to extend to the workplace – concerns over job security and redundancies, lower morale and engagement will all be high up on the list of concerns.
As an employer, a few employee-centric measures can be implemented, in order to show that you are aware of, and care about, their needs:
- Offering flexibility with working (hybrid and remote) where possible can be of great help to your employees, as it allows them to save on travel costs, congestion fees, parking and other costs.
- Try and involve employees in restructuring decisions where possible – by involving team leaders and junior/middle management in these decisions, you can enable senior management to evaluate skillsets and team value in more detail.
- Ensure you have a strong workplace culture – this is vital to ensure higher levels of morale as times get difficult.
- If finances are available, offering monetary support to your employees can help significantly.
- Keep communication channels open – it is important to regularly update staff on upcoming changes, alleviate any potential concerns that they may have, and to maintain transparency and clarity.
Regardless of the methods you choose, keeping morale high, and demonstrating to your employees that you are considering their needs, should be a salient factor that you consider when planning for a recession.
If worst comes to worst
Unfortunately, in times of economic recession, redundancies may be required. If worst comes to worst, and you do need to make redundancies, as an employer, make sure that the way in which you make these redundancies is considered and thoughtful, i.e. providing CV and skills workshops may help employees at risk feel more confident in re-entering the job market. Considering the impact the company direction will have on your existing employees can have a positive impact on your future recruitment when the economic landscape is more positive, and will ensure affected staff leave your business with the best possible chance of quickly regaining employment elsewhere.
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