When it comes to predicting a recession, the answer is never obvious. Because the market has unexpectedly collapsed in the past, HR professionals should already be in planning mode. If your employees start asking and you don’t have a solid strategy, it’s too late.
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Be Consistent, Transparent, and Open
It is never a bad idea to evaluate your organizational structure to ensure you’re operating efficiently and effectively. A significant element of effective business operations is having a culture that is open and transparent.
Complementary to that is a successful way to communicate your business strategy to your employees. I believe “successful” is the key word here. You may communicate a plan, but are your employees really hearing you? Do they feel involved and engaged in your strategic plan?
The Economist Intelligence Survey reported the top three consequences of poor communication:
- Added stress (52% of employees)
- Delay or failure to complete a project (44% of employees)
- Low moral (31% of employees)
When your organization faces a challenge (downturn or not), it is paramount that your message be heard. Otherwise, even the best plan goes unnoticed.
As you plan to engage your employees and inform them of your organizational plan, consider not only your message but also the way you communicate it. If you are transparent with your employees, you open the door for honest dialogue. It’s a two-way street. You don’t want to be blindsided any more than your employees do, so build a culture of trust.
Offer Financial Wellness Support Now
Even if your organization is fortunate to have weathered an economic downturn, that doesn’t mean the effects won’t be felt by your employees. It is more important now than ever to educate employees and prepare them to manage their finances and improve their financial situation. Give them tools to track their spending, create budgets, and see where their paycheck is going. Likewise, if they start preparing and saving now, they’ll be better equipped to handle financial challenges if a downturn happens.
In the annual Financial Stress Survey, conducted by John Hancock, 72% of respondents indicated that they worry about personal finances during their workday, and for many, this happens multiple times a week. The cost of this to employers is $2,000 per employee every year in lost productivity.
Based on the 2019 PwC Financial Wellness Survey, 27% of employees would most like to see access to unbiased financial counselors added to their employee benefits, followed closely by student loan repayment benefits at 26%. Both services should be included in a comprehensive financial wellness program.
And did you know that when financial wellness programs are offered, 93% of employees value their employer more? You’ll also keep good employees longer, as financial wellness programs are proven to increase employee morale by 43%.
A good financial wellness program will offer financial education resources and personal assessments/surveys to help employees identify their current financial situation and set goals to get them back on track.
If employees can get a jump on personal financial improvements, they’ll feel more confident in their financial position should they encounter a financial challenge (or worse). This confidence will have a direct impact on their performance at work. They’ll have one fewer worry and stressor that could take their focus away from their job responsibilities.
Be Clear about Roles, Skill Sets, and Development
As you evaluate your evolving organization, you may find opportunities for employees to tackle new projects or assume additional responsibilities. Most employees welcome new challenges, so don’t shy away from presenting these opportunities. It keeps their day-to-day responsibilities fresh and gives them a chance to expand their skill set.
Also, make sure you clearly define employee roles and expectations. This will give both parties clarity on the job requirements and contributions to the organization. Set goals that are essential to moving your business forward and achieving the strategy you’ve communicated. By doing this, your employees will have a focus and clearly see their contribution to the overall goals of the business.
Investing in your employees shows them that you believe in their potential and growth with your organization. If you’re invested in their professional development, they’ll be more likely to stick by you and pitch in when you need all hands on deck. You’ll see personal commitment and investment from your employees when they know you’re all in and that you want them to succeed.
If your organization is consistently evaluating and improving both cultural and organizational opportunities, your employees will understand that you’re getting ahead of a potential downturn and assessing opportunities. Most employees will appreciate your preparedness and may even come up with some ideas of their own to cut costs or create efficiencies. So, be open to ideas—we’re all in this together.
David Kilby is a personal finance expert and president of FinFit, a fintech company that provides over 125,000 employers with a unique financial wellness benefit platform.