One leading indicator of a recession is back-to-back quarters of a decline in GDP. Government data last week confirmed a decrease in the second quarter after we already saw a decline in Q1 of 2022. As shared in a recent New York Times article, Harvard economist Jeffrey Frankel said, “A month ago, I was writing that it was very unlikely that we are in a recession. If I had to write that now, I would take out the ‘very.’”
Recession or not, we’re living through economic uncertainty.
And people are understandably feeling anxious.
Have you considered what you, as a business leader, can do to help ease the concerns of your team members? What your HR team can be doing? After all, Human Resources work is about being a resource for the humans on your payroll – beyond simply being the ones to hire and fire.
Leaders and HR professionals can take action right now to help prepare employees for what could be a tough financial road ahead. You are responsible for paying your people, but great employers do more than that. They make an effort to provide team members with tools, benefits, and education so they are well-equipped to make wise financial choices.
It doesn’t take a personal finance expert to realize that right now – before a potential full-blown recession – is the time to get serious about budgeting and saving money. This is a message businesses can begin sharing with their team members immediately, along with advice on how to do so. Encourage employees to support each other in their budgeting and saving journeys. Celebrate personal finance “wins” with the team. Create a sense of togetherness and support during this time of economic uncertainty. Start today.
There are also things leaders and HR professionals can do if and when a recession officially hits. When the alarm is sounded, employees who were in the workforce during the 2008 financial crisis may be hit hardest by fears of the worst: namely, massive layoffs. No matter the economic health of your business, this is a time to communicate, communicate, communicate.
Being laid off is terrible. Being laid off unexpectedly is even worse.
Transparency from leadership matters at a time like this. What will the recession likely mean for your business? For your bottom line? How much or how little you share with your team is up to you, but don’t be silent. Your company is your people, and they deserve to understand what the future likely holds.
Economic downturns are scary – especially for workers who depend on someone else for a paycheck. How leaders react and communicate during financial uncertainty tells the true story of your mission, values, and employer brand. Times are tough for companies across industries and sizes, but a looming recession is an opportunity to step up for your people and show them yours is a company that cares.
Written by Katherine Daniel and spotlighted on the Wilmington Business Insights.