Economic forecasts and recession planning for business leaders
Recession forecasts have dominated headlines recently, following falls in house prices and factory output across the UK. These headlines can be worrying for business leaders and staff members alike — so it’s important that we prepare our teams for these turbulent times.
Research shows that during the 2008 global downturn, the S&P 500 saw a 35.5% decline in stock performance on average. But some S&P 500 companies didn’t see a decline — in fact, companies with positive employee experiences saw a 14.4% gain.
Staying positive and competitive throughout a recession isn’t easy. But if you manage to stay optimistic, you can help your company weather tough economic times while promoting good staff wellbeing (including your own).
Cultivating positivity despite uncertainty
Whether in reality or due to media portrayal, recession breeds uncertainty. People start worrying about their job security and financial stability. This leads to indecisiveness, negative mindsets, and a lull in creativity.
It’s easy to slip into this state when navigating a recession. But your mindset can feed into the culture of your company, making staff feel uneasy and leading to assumptions about the company’s health. So it’s essential that we take conscious, positive actions to protect our staff — and ourselves — from this negativity.
Reframe recession as an opportunity rather than something to fear. During the 2008 financial crisis, the leadership team at Speakers Corner decided to break the mould by giving our whole team the chance to call our clients and find out how we could support them. This kept our teams busy, even if their normal department was quieter than usual, and it also gave them the chance to build relationships with our clients on behalf of our company.
Giving people clear guidelines with limited targets and expectations helped keep them calm and focused. But it also boosted our revenue during a tricky time — and gave us an opportunity to celebrate successes we wouldn’t otherwise have had.
Overcoming short-term hurdles vs achieving long-term goals
It’s easy to hunker down in the face of recession. Economic crises bring plenty of short-term hurdles — so while businesses can grow during these times, successes are the exception, not the rule.
It’s human instinct to protect yourself and what you have. But ultimately, you must stay true to your long-term vision for your business and what you want to achieve. This is how you cultivate positivity among team members, who will ultimately keep your business afloat during a recession.
Instead of hunkering down, take a leap of faith in the people around you. Get them involved and inspire them to innovate. Celebrate mistakes. If you have the means to reassure your workforce that their jobs aren’t at risk and you’ll all sink or swim together, your people will do amazing things.
How to minimise the impact of recession on your business
Staff are the most valuable asset you have. So keeping them onside should be one of your key concerns during difficult economic periods. Try these tips to maintain positive employee experiences at your company:
- Be transparent — Don’t pretend it’s business as usual, and don’t take action without explanation. Make sure all your decisions are explained to staff, and put certain things up for discussion if you can. This will make people feel valued and involved.
- Don’t sweat the small stuff — If you need a substantial change in strategy, do it at the top. Don’t get embroiled in teabag rationing and other small matters — this can damage morale, and it won’t save much money in the long run.
- Discuss the future — Look beyond the recession to how you’ll ramp up once you get through the tough times. This positive long-term mindset can help staff accept certain short-term changes that will get you through the next few months.
- Prioritise training — Staff development may not feel like a priority right now, but it’s a great way to make people feel valued, improve the skills at your company, and give people fresh ideas for how they can contribute to the business.
All these actions are well within your control as a business leader. So, instead of jumping to cost-cutting measures like redundancies as a knee-jerk reaction, try to take a more positive approach to recession management. This will prioritise staff wellbeing so you have a more productive, contented team to take you through the turbulence and beyond.
Innovation: the key to recession management
Some businesses thrive in a recession because they come up with unique business and marketing strategies that pay off. So, it’s also worth investing in ways to inspire innovation in your own team.
Team building days are a great way to promote positivity during difficult times, especially if you have a hybrid workforce. Hire an external speaker to bring a fresh perspective to your business. They can help you set up an ideas forum that gives staff the opportunity to suggest solutions to see you through the recession.
As people contribute more to your company — whether through upskilling or innovating — offer incentives that empower them in the business. This could include giving them more responsibility, involving them in more decision-making processes, and offering pay increases when possible.
While you might not achieve the goals you set out for the company at the start of the year, you could achieve things you’d never even considered. So, take a flexible, positive approach to recession and let your people help you navigate upcoming economic challenges.