Opinions expressed by entrepreneur contributors are their own.
With the market sliding and layoffs and reorganizations at growing companies, many businesses are tightening their spending and looking for ways to weather an unfolding economic storm. As businesses look for opportunities to reduce burnout, investment in employees is the first thing to be cut.
Over the past two-plus years, businesses have navigated unpredictable disruptions—from pandemics to climate change to geopolitical upheaval—that have forced leaders to rethink business continuity and sustainability. As a result, businesses have finally put people first. Leaders have learned to listen to what their employees and candidates want.
But the market is changing, and instead of holding onto the talent that leaders have worked so hard to recruit, retain and cultivate, some businesses are in danger of leaving their employees behind. Ultimately, your people will feel the lack of investment in them and may consider switching ships to organizations that still put people first.
In today’s climate, the need to cut costs is very real for many organizations, but we also know that losing employees is incredibly costly. Whether voluntary or involuntary, employee turnover is expensive. It costs organizations 1.5-2 times the employee’s salary, including the time and resources dedicated to recruiting, onboarding and training a new team member. In challenging markets, it’s even harder to absorb those costs—not to mention the hidden costs of turnover, such as more responsibility for remaining employees, decreased productivity, lower morale, and loss of employer trust.
That’s why now is the time to redouble your care of your workforce. People are the foundation of a strong company and their well-being is central to your business continuity plan.
Related: How to create a sustainability plan for your business
Invest in your people
Now, more than ever, it’s imperative to invest in your employees. In reality, retention continues to matter even in the face of economic uncertainty – you need to retain your people to drive growth. However, during challenging times, employee morale usually suffers. Therefore, this can affect productivity, which is especially critical in a turbulent market. This means now is not the time to pull back from employee experience activities. Instead, investing in team building and meaningful experiences will send the message that you value your people and instill confidence in your organization’s growth.
Investing in your employees doesn’t just mean allocating a financial investment. Consider how you can dedicate existing resources to improve employee processes, workflow and communication. For example, temporarily reallocate an affected department to focus on the employee experience. If hiring is slowing, consider using your recruiting team to support employee enrichment.
Successful and resilient companies are built in difficult times. While it can be a tough market today, it’s essential to keep perspective and think long term. If you lose a top performer during this time frame, what impact will that have on the next 12-18 months? After weathering this storm, you need to think about how you will come out on the other side. This looks like retaining your workforce, especially your top performers.
Related: Investing in your people is investing in the future of your business
Commit to transparency
Building a culture of trust starts with transparency, from both leaders and teams. In fact, a Harvard Business Review The study found that 58% of people trust strangers more than their boss. People need context and transparency to do their jobs well, and even more so in uncertain times. Your team wants to hear from you—and they want to know that you and your leadership team have a plan. Silence can be dangerous, and this is when people misinterpret and speculate, which ultimately leads to damage to the culture.
When employees are given the full picture of your company’s health, they can more easily understand how they fit into the big picture strategy. For example, company-wide meetings are critical. However, they are only as useful as the information you share. It’s important to celebrate milestones and talk about strategy, but it’s just as important to walk your entire company through your KPIs. If possible, share your high-level company finances with employees – the truth is always better than rumours.
Transparency becomes especially necessary when your organizational chart changes. After significant workforce disruptions, people need to know who to report to, who their cross-functional partners are, and where to go for help. When your organization is transparent, your people will be more empowered to stay agile in a changing landscape.
Related: How to Lead with Transparency in Times of Uncertainty
Look for consolidated solutions that drive efficiency
During a tough market, you may get some pushback from your finance executives to review your technology stack and vendor spend. However, cutting back on investments in core systems can ultimately reduce your organization’s productivity and efficiency. This is closely related to your retention and the experience of your people. If your employees find themselves taking on more work, removing the resources that help them do their jobs is likely to worsen employee morale and sentiment.
Instead, look for ways to consolidate your technology group and vendors. Identify partners who can help you do more with less. Investing in multi-purpose solutions will support your employees by helping them remain flexible and productive while controlling costs.
Efficient and consolidated solutions can also lay the foundation for streamlined processes and a single source of truth, which drives efficiency. Too often, using a multitude of spreadsheets and vendors leads to disparate sources of information. It can be hard to find information when you need it, and when you need it, it may not be up to date. Consolidation is not only the key to investing in your employees, but can be the catalyst for driving more efficient processes.
While we cannot control how long this period of economic uncertainty will last, we have the power to build resilient businesses that can withstand challenging times. Your people are the anchor of your business, in good times and bad. While it’s natural to start thinking about ways to save, don’t lose sight of how this will affect your most valuable assets. If we invest in our people today, not only will we emerge stronger, but we’ll be better able to weather business disruptions in the future.