Economists put the chance of a recession in 2023 at 63 percent. In response, 72 percent of leaders are starting to prepare and look for ways to safeguard their business, reprioritize how they make decisions, and lead through disruption. It’s been found that cutting jobs and operating costs alone makes it more difficult for a business to survive a recession. Resilient companies invest and grow, and one of the primary ways to invest during times of economic uncertainty is through talent management and having a strategic approach to hiring, retaining, and utilizing talent. However, developing and implementing a strategy that effectively uses your organization’s talent resources while navigating change and evolving goals is not an easy task.
Related: Creating Successful Talent Strategies to Achieve Business Results
72 percent of HR leaders are somewhat or extremely concerned about losing talent over the next 12 months. Retaining talent at a startup is especially critical because every employee makes essential contributions. Given current talent shortages, startup leaders know the value of top talent and are focused on retaining their best people. Here’s how:
Offer flexible work options: 70 percent of CEOs strongly or somewhat agree that flexible work—including remote—is increasingly critical to reducing employee turnover during an economic downturn. Half of Americans want to work from home in 2023. The happiest people have a healthy work-life balance and can split their focus between work and personal and get value and satisfaction from both. Employee happiness plays a significant role in employee turnover. 75 percent of unsatisfied workers are looking to leave their current positions, so offering flexible work is a successful solution to increase retention.
Focus on employee well-being: Since the pandemic’s start, employees have been dealing with uncertainty. 59 percent of CEOs strongly or somewhat agree that during an economic downturn, there’s an even greater need for firms to focus on well-being—including childcare and mental health. Fear of a recession is now contributing to lay-off anxiety, financial stress, and disappointment over hiring and raise freezes. During times of uncertainty, it’s essential to keep the lines of communication open and foster a culture of recognition. Initiatives like expanding caregiver benefits for children and elder care and providing access to a 24/7 mental health support line are ways to prioritize your workers’ well-being.
Invest in learning: In times of uncertainty, it’s important to connect learning initiatives to organizational goals and use them to generate high performance. In addition to 30-50 percent higher engagement and retention rates,Deloitte research has found that organizations with a strong learning culture are:
- 92 percent more likely to develop novel products and processes
- 56 percent more likely to be the first to market with their products and services
- 52 percent more productive
- 17 percent more profitable than their peers
Attract laid-off or unhappy talent: 57 percent of CEOs strongly or somewhat agree that with other companies reducing their headcount, an economic downturn presents an opportunity to attract and retain talent. Your more established competitors may lay off workers or become lax and lose talent when employee engagement and morale drop. A recession can be the best time to procure talent your startup could not previously attract.
With a low unemployment rate and strong labor market making it easier for workers to find a job quickly, bringing laid-off workers back could be more challenging than the last recession in 2008. To minimize the effects on your startup, focus on employee retention. For every leadership decision made, weigh all cost management options in relation to the impact on talent.
This blog was written by Senior Talent Management and Organizational Transformation Consultant Andrew Nash.