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With the market sliding and company layoffs and reorganizations on the rise, many businesses are tightening their spend and looking for ways to weather an unfolding economic storm. As businesses look for opportunities to reduce burn, investments in employees are the first thing to be cut.
Over the last two plus years, businesses have navigated unpredictable disruptions — from the pandemic to climate change to geopolitical unrest — that have forced leaders to rethink business continuity and resiliency. 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 on to talent that leaders have worked so hard to recruit, retain and cultivate, some businesses are at risk of leaving their employees behind. Ultimately, your people will feel the lack of investment in them and might consider jumping ship to organizations that are still prioritizing people.
In today’s climate, the need to reduce costs is very real for many organizations, but we also know it’s incredibly costly to lose employees. Whether it’s voluntary or involuntary, employee turnover is expensive. It costs organizations 1.5-2 times the employee’s salary, including dedicated time and resources to recruit, onboard and train 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 responsibilities for remaining employees, decreased productivity, lowered morale and lost employer trust.
This is why now is the time to double down on taking care of your workforce. People are the foundation of a strong company, and their wellbeing is central to your business continuity plan.
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. Yet during challenging times, employee morale typically suffers. Accordingly, this can impact productivity, which is especially critical in a turbulent market. This means that now is not the time to pull out of employee experience activities. Instead, investing in team-building and meaningful experiences will send the message that you value your people, and it will instill confidence in your organization’s growth.
Investing in your employees doesn’t just mean allocating a financial investment. Consider how you can devote existing resources to improve employee processes, workflow and communication. For example, temporarily re-allocate an impacted department to focus on employee experience. If hiring is slowing down, consider leveraging your recruiting team to support employee enrichment.
Successful, resilient companies are built in difficult times. While it may be a tough market today, it’s essential to keep perspective and think long-term. If you lose a top performer during this period of time, what impact will that have in the next 12-18 months? Once you weather this storm, you need to consider how you will come out on the other side. That looks like retaining your workforce, especially your top performers.
Commit to transparency
Building a culture of trust starts with transparency, both from leaders and teams. In fact, a Harvard Business Review study revealed that 58% of people trust strangers more than their own boss. People need context and transparency to do their job 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 that’s when people misconstrue and speculate, which ultimately leads to culture damage.
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’re only as helpful as the information you share. It’s important to celebrate milestones and talk about strategy, but it’s equally as important to walk your whole company through your KPIs. If possible, share your high-level company financials with employees — the truth is always better than the rumor mill.
Transparency becomes especially necessary when your org chart changes. After significant workforce disruption, 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 become more empowered to remain agile in a shifting landscape.
Look for consolidated solutions that drive efficiency
During a tough market, you may get some pushback from your finance leaders to examine your tech stack and vendor spend. Yet, cutting back on investments in key systems may ultimately decrease your organization’s productivity and efficiency. This is closely aligned to your retention and your people experience. If your employees find themselves taking on more work, removing resources that help them do their job is likely going to worsen morale and employee sentiment.
Instead, look for ways to consolidate your tech stack 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 still controlling spend.
Efficient, consolidated solutions can also set 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 do, it may not be updated. Consolidation is not only key to investing in your employees, but it can be the catalyst to driving more efficient processes.
While we can’t 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, both in good and bad times. While it’s only natural to start thinking about ways to save, don’t lose sight of how this will impact your most valuable assets. If we invest in our people today, not only will we come out stronger, but we’ll be able to better face future business disruptions.