The threat of a looming recession is never positive news. It often comes with panic, fears of financial hardship and uncertainty surrounding the future.
If you are in a leadership or management position, you are tasked with finding a way to stay positive when a recession potentially hits. If you catch yourself struggling to find ways to keep spirits up when profits are down, here are some tips to stay positive during a recession.
How to communicate with employees
Communicating with your employees during a recession can be tricky. You need to find a way to give your team a clear picture of what’s happening without fostering negativity. As a leader, it is your job to find that balance.
“Not communicating with your employees will lead to the death of productivity. This is especially true during a recession. A well-informed employee is a productive employee,” says Matt Masiello, chief marketing officer of BabyBuddha.
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While it’s your job to lead your team through these trying times, you also need to be realistic. Don’t paint a sunny picture of the future if you know it won’t come to fruition. Your staff will only end up resenting you for it. Instead, use the following methods to communicate with your team when profits are down.
You never want to leave your employees in the dark about the company’s future, especially during a recession. Constant communication is the key to sustaining a productive work environment when things become uncertain. Too much information is always better than too little.
“You have to trust the people you hired with any and all information. If you don’t trust them, how can you expect them to trust you?” asks Erin Banta, co-founder and CEO of Pepper Home.
Communicate with your employees every step of the way, and don’t slow down. Every development should be shared as it occurs. This will help employees feel less anxious during times of uncertainty.
Leaders often underestimate the importance of employee insight into their companies’ inner workings. When your employees know what you know, it becomes easier for them to understand your decision-making process. This will leave you with a group of people who respect you more and are willing to work harder to meet your goals.
“Don’t handle your employees with kid gloves. Not only is this insulting, but it can lead to your employees feeling resentful and distrustful, both of which are bad for business,” cautions Brianna Bitton, co-founder of O Positiv.
Constant communication is great, but without transparency, it means nothing. You need to keep it real with your staff. Be honest about where your company stands and the potential of layoffs, if any.
Hear their concerns and be empathetic
If you haven’t already, consider instituting an open-door policy during hard financial times. Allow your employees to come and have conversations with you to help ease anxieties about layoffs or hour reductions. When employees come to you with concerns, be empathetic to them.
“Employees who believe that management is concerned about them as a whole person—not just an employee—are more productive, more satisfied and more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability,” says Anne M. Mulcahy, former CEO of Xerox.
Remember, when employees come to you with concerns, they are worried about their own security. These concerns are far beyond the bounds of your company. They include fears about paying their bills, feeding their families and losing their health insurance. Treat their concerns with the level of seriousness that they deserve.
Don’t spread negativity
It can be hard for managers and leaders not to have fears of their own during a recession. This is totally normal. The trick is not to bring that negativity to your team.
“When you become a leader, you have to put your team’s success over your individual success. When done right, these two will be one and the same,” explains Marcus Hutsen, business development manager at Patriot Coolers.
You’ll need to find a way to balance positivity while still being transparent with your team. Don’t sugarcoat things, but also avoid any doom and gloom. While this may be easier said than done, that balance will make you a great leader.
Get feedback from frontline employees
Take the time to get feedback from your frontline employees. These employees have invaluable insight that may be crucial to getting you through a time of decreased profits. Set up weekly meetings with your frontline team to open up the discussion.
“As a manager, don’t make the mistake of thinking that you have the greatest insight. Some people work closer to not only your product but to your clients. Lean on them for information when you see fit,” advises Dan Potter, head of digital at CRAFTD.
While you have unique insight into each aspect of the company as a leader, your employees work directly with clients, products and company data. They have more detailed insight into these areas than you do. Try and utilize to your advantage this as much as possible.
Don’t stop recruiting
It can be tempting to halt hiring altogether when profits dip, but a hiring freeze can have long-lasting effects on your company. While this is sometimes unavoidable, you should weigh the effects that not maintaining a high-performing workforce will have in the long run. Many of today’s top leaders believe cultivating a strong workforce should continue during economic hardship.
“Talent is the No. 1 priority for a CEO. You think it’s about vision and strategy, but you have to get the right people first,” says Andrea Jung, CEO of Grameen America.
If you stopped hiring completely, there is a good chance that you could miss out on top talent. With the addition of top talent comes new solution-finding opportunities. These opportunities may just help to move you past the challenges that you are currently facing.
Continue to invest in your employees
Another thing that is easy to cut down on during a recession is employee training. However, you’ll want to continue to invest in your employees during these times. Not only will this lead to staff loyalty and commitment, but it will also instill confidence in them.
“Invest in your staff as much as possible and share opportunities for growth as they come. If you don’t, your best talent will find those opportunities elsewhere,” warns Alia Bedi, general manager of L’Evate You.
It’s important not to hold back on opportunities for employee growth. Well-deserved promotions should continue to occur when profits are down. If you halt growth opportunities, you could lose your top talent.
Another area that companies are all too willing to cut back on is marketing. Although marketing can seem like an expendable expense, it is quite the opposite. Marketing is responsible for growing your customer base and increasing your reach as a brand.
“Never underestimate the power of marketing. Marketing is what will help to drive you forward and grow your brand. The second you stop marketing is the second you stop growing,” explains Soji James, lead expert certified personal trainer at 1AND1.
Keep marketing yourself to the public when times get tough. You never want to stop seeking out new consumers. This can only hurt you during a time when you are already hurting financially.
Continue to adapt
If you want to survive a recession, you have to adapt. When the pandemic first hit, we saw how adaptable businesses really are. Event companies started renting tents to pop-up testing sites, clothing companies started making masks, and anyone who had the ability to create hand sanitizer was doing it.
“Adaptability is one of the most important qualities a company can have. All markets go through shifts and changes. Can you keep up?” asks Derek Flanzraich, founder and CEO of Ness.
Your willingness to adapt to the current economy will determine your ability to succeed. Try to diversify revenue channels, adjust growth expectations and mitigate financial risks to the best of your ability. If the only choice is to sink or swim, you’ll want to learn how to swim.
Be discerning with sales leads
One mistake many leaders make during a recession is to pursue all sales leads, no matter the cost. This is not a smart way to operate when funds are limited. Don’t waste resources on leads that you don’t believe in.
“If you have the resources to throw everything at the wall to see what sticks, go for it. But if you don’t, it’s one of the worst things you can do for your business,” cautions Ryan Rottman, co-founder and CEO of OSDB.
You should have a clear process and procedure for identifying prospective leads. This will allow your team to decide better which leads to spend time on and which to leave behind. You can also take this time to improve your process during the current crisis.
Keeping spirits high
Recessions are hard on everyone. They bring times of uncertainty, financial hardship and anxiety about the future. When everything feels bleak, your job as a leader is to work against that, even while fighting feelings of negativity yourself.
“All industries have an ebb and flow, but none are immune to an almighty recession. The good news is that if you can find a way to make it to the other side, you’ll be foolproof,” says Max Ade, CEO of Pickleheads.
Utilize some of these methods to help keep spirits high during economic uncertainty — and don’t forget to take care of yourself. Managers and leaders aren’t immune to the hardships of tough financial times.
Lee Enterprises newsroom and editorial were not involved in the creation of this content.
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