Article contributed by Heather Nezich, ASE, Michigan and Meredith Wise, EANE
Predictions for a recession or economic slow-down are constantly changing! We’ll have recession in the 3rd and 4th quarter of 2023; no wait, it won’t happen until the 1st or 2nd quarter of 2024; no wait, maybe we’ll just see a slight slowdown. If your leadership is talking about all of these predictions, join the club. We are all attempting to forecast and plan for the future. The only thing we know for sure is that we are living in economically uncertain times. Since employees are a company’s greatest asset, successfully navigating economic uncertainty relies on investing in them.
To strike a balance, companies should optimize their workforce now while focusing on long-term success. The following workforce investment strategies can help businesses become ready for whatever happens:
- Optimize workforce capacity to drive efficiency gains:
Preparing for a downturn or recession often requires operating within resource limitations. Companies seeking cost-saving opportunities can maximize efficiency by conducting targeted assessments of their workforce. By evaluating current workloads and total capacity, leaders can use real-time data to identify gaps and develop strategies to address them. This can involve skill development, process redesign, work reallocation, and cross-training. Given the uncertainty of the future, proactive modeling of various capacity scenarios can help anticipate potential impacts and determine necessary actions.
- Continue investing in building the future workforce:
In cost-conscious environments, it’s crucial for leaders to make confident decisions on where to invest limited workforce resources, particularly in terms of building versus buying talent. To ensure these investments yield the highest returns, organizations can engage leaders from various functions in structured, strategic workforce planning exercises. This involves addressing important questions such as: How does our future business strategy impact the work that needs to be done? What skills and roles do we need to achieve our new goals? This presents an opportunity to redefine the talent requirements for the present and the future. The aim is to thoughtfully reallocate talent to fill gaps and alleviate workload burdens.
- Foster transparent communication to alleviate anxiety:
Economic uncertainty often amplifies anxiety among employees. Surprisingly, a significant percentage lack confidence in their organization’s leadership (24%) and feel less confident than they did six months ago (32%). To build trust, leaders should prioritize clear and intentional communication with employees at all levels and through various channels. Employees want to be informed about the business’s expectations and the actions being considered. Sharing this information can help reduce anxiety and mitigate negative impacts that can affect the entire organization.
- Implement innovative retention strategies:
Tight budgets can make it challenging to reward top talent with traditional pay incentives. It’s essential to think creatively and find ways to make employees feel valued. For instance, companies can establish an internal talent marketplace that opens up new career paths. Research on internal mobility programs reveals that while 54% of employees believe they have better job opportunities within their current organizations, only 23% have been able to transition to a new internal role. Supporting internal talent involves connecting with employees regarding their long-term goals, actively promoting networking opportunities, and removing barriers to role transitions.
- Embrace a strong sense of purpose to motivate employees:
Leaders should assess whether their organizational purpose is still relevant and inspiring for employees. This requires an objective look at what the organization is doing to foster and improve employee connection and asking employees what they need to feel connected. 60% of U.S. employees say that feeling connected to work has the greatest impact on their ability to do their job.
Investing in employees is essential to emerging stronger from a weak economy. The best way to strike a balance is to optimize for the here and now while strategically investing in employees to prepare for what’s next.