So far the UK has defied expectations that it will fall into recession. However, recession is still anticipated – with GDP expected to fall 0.5 per cent over the course of 2023 and 0.25 per cent in 2024.
When the outlook is bleak, business leaders can be quick to cut costs with ‘HR initiatives’ often the first to be trimmed or dropped altogether. However, initiatives that support the health and wellbeing of employees should be ring-fenced during a time of economic turmoil rather than seen as an easy target for cost-cutting measures. And, where possible, businesses should be looking to invest more rather than less in their people, as Ian Barrow, Senior Employee Experience Consultant at WorkBuzz explains.
Recession can understandably result in organisations going into survival mode – reducing the size of their workforce, cutting spend, finding process efficiencies and putting unnecessary initiatives on hold. Looking at the 2008 recession, scores of people lost their jobs and employers stopped hiring. By the end of 2011, almost 2.7 million people were looking for work. On top of this, productivity can be severely impacted due to businesses ‘hunkering down’, with productivity effectively flat-lining since the 2008 recession in what has now been termed “the productivity puzzle”.
Businesses are understandably concerned we’re going to see a repeat of 2008, with productivity impacted even further and perhaps even going into a downward spiral. And, although getting businesses recession-ready may require cost-cutting, leaders must ensure this isn’t at the detriment of employee wellbeing. In fact, while it may seem counter-intuitive, now is the time to invest more and not less into employee wellbeing.
When employees are being squeezed financially, this has an impact on their wellbeing, engagement levels and ultimately productivity. In fact, according to CIPD research, more than a quarter of UK employees say money worries affect their ability to do their job. This rises to nearly a third who say cost-of-living financial worries have negatively impacted their productivity.
Somewhat unsurprisingly, financial worries also lead to mental health struggles. A 2022 survey revealed 59 per cent of adults thought the cost-of-living crisis was having an adverse effect on their mental health, with one in five saying the pressure was so much they felt “unable to cope”.
When employees feel less stressed and more cared for by their employer, they take fewer sick days, are less likely to leave, have a lower risk of burnout and deliver more.
There are a number of initiatives organisations should be considering to more effectively support their employees’ financial, mental and social wellbeing. Signposting employees to regulated financial advice, providing discounts and cashback opportunities, and training managers on how to identify and support employees who are struggling with mental health are key. In addition, investing in mental health first aiders (MHFAs), mental health support services and a peer-to-peer staff recognition scheme help employees feel supported, valued and appreciated – all of which are crucial for keeping them engaged, motivated and productive.
As well as investing in every individual’s wellbeing, a supportive and active listening culture must be cultivated – in which every person feels they can be themselves and have a voice. Organisations that ask employees what they think, listen to their feedback and then action it, nurture a strong sense of belonging. And when people feel they belong, they’re more able to contribute towards organisational success.
When times are tough, the temptation is to see employees and the support they’re provided with as costs to be cut. But, if leaders concentrate as much – if not more – on their people during the challenging times, they’ll reap the rewards in terms of engagement and performance.
