How to Create Teams That Win in Trying Times In this article, Janice Omadeke, CEO and Founder of The Mentor Method, shows how companies can outlast market fluctuations while retaining their most valuable asset: their people.
By Janice Omadeke Edited by Chelsea Brown
Opinions expressed by BIZ Experiences contributors are their own.
In the 20th and 21st centuries, economists have marked 15 distinct recessions in the United States (so far) that directly affected the lives and bank accounts of millions of Americans. During these economic downturns, the same sequence of events always inevitably plays out: Investors get nervous, demand falls, businesses begin to fail or struggle, and unemployment rises, often due to layoffs. Despite this, the economy always — eventually — recovers.
It's important to recognize the reality of the fears that plague those affected by recessions when they are happening as lives and livelihoods are affected in real, meaningful ways. But at the same time, it's easy to forget that recession is a natural part of the economic lifecycle. The economy has seasons, and recession is its winter. As much as we may want to rail against it, hoping to turn from autumn to spring, winter always comes.
Wielding this knowledge, it's easier to prepare for financial winter by strategically shoring up our businesses and making investments in the right places. Doing so provides economic security against the changing seasons, ensuring that come spring, our businesses are still standing.
Related: 4 Things Employees Want From Leaders During Uncertain Times
Weathering the inevitable
Winter is coming.
For businesses bleeding cash, layoffs are often inevitable as reducing overhead is frequently the quickest and most straightforward method of stemming the flow. However, building a company able to outlast long-term market volatility often relies upon its ability to retain its most important asset: its people.
Doubling down and making strategic investments in employee retention and satisfaction at the first sign of economic distress is among the best ways to ensure long-term business survival. When employees churn, businesses are stripped of their ability to serve customers, create products and produce innovation at scale. These are the most necessary components for competing in an environment where every dollar matters while consumers and other business owners tighten their belts against the harsh economic climate.
While layoffs may be inevitable, investing in the satisfaction and retention of every employee possible will not only maximize their output but create an environment of psychological safety that will not be forgotten when economic spring comes again. Keeping as many engaged employees as possible also makes sense financially, saving millions in training and onboarding costs when companies inevitably need to ramp back up when the seasons turn.
Related: How Business Leaders Can Keep Employees Engaged
Respond. Don't react.
As with business practices made common during the pandemic, surviving a severe economic downturn — with or without the recession label — can be confronted in several ways, each accounting for various degrees of action by leaders:
Option 1: Do nothing, and close for good.
It's not uncommon for many operations that are currently on the brink to see these extra challenges as the last straw and fold up as the path of least resistance. There's no shame in this, and for many companies, taking this path may end up being the healthiest and least-traumatic option.
Option 2: Continue half-measured triages to the outflow of talent, hoping things will go back to "normal."
Companies can try implementing what they have already tried during pandemic shutdowns: virtual events that are only fun the first two or three times, pulse surveys and performance reviews as an archaic and ineffective way to measure success. These tactics, however, didn't do much to improve employee productivity then — and they won't now. Workers are asking for authentic acknowledgment, development and respect, none of which are fulfilled by phoning it in.
Option 3: Prepare ahead, and double down on investments to retain employees for the long haul.
If trends from previous recessions hold, companies won't have the budget to afford high turnover and replacement costs caused by both layoffs and the subsequent re-hiring when the environment stabilizes. Additionally, employees will be overworked due to the stress of fewer people attempting to complete the same or similar amount of work as a full staff.
By genuinely investing in their workforce ahead of time, leaders can maintain higher levels of morale, keep their key players in mission-critical roles and maintain the integrity of institutional knowledge over time.
Related: 4 Tips To Keep Your Business Afloat in a Downturn
Making it matter
When it comes to employee engagement and retention tools, all options are not created equally. The idea of the employee pizza appreciation party has itself become a meme — It's not a good look and makes employees feel infantilized and unheard.
Opt for true investments such as mentorship programs, learning/educational opportunities and tools for professional development. Offer opportunities for employees to share their opinions and feedback without fear of judgment or retaliation. True engagement can feel uncomfortable for those in power. That can be a good thing.
Most importantly, it's crucial to remember that these steps are preventative measures to be taken before the situation is dire. Expecting teams to work harder under more pressure and increased stress is a significant ask for employees who are overworked and have fears and insecurities that leaders are likely unaware of. By engaging employees in meaningful ways, the return on investment on difficult days will pay off in spades.
