The pandemic has caused the most significant economic downturn since the Great Depression. According to the International Monetary Fund, the lost economic output from COVID-19 could reach $9 trillion through 2021. This grim outlook will affect the worldwide business community. A focus on company culture can help businesses weather this devastating storm.
Why focus on company culture?
Healthy company culture isn’t a mere nicety. Your culture has a major impact on the bottom line. SHRM estimates organizations lose $45 billion per year due to employee turnover caused by poor company culture. So while more concrete metrics such as payroll or marketing costs may be the first things you look at during a downturn, your company’s culture should remain a priority.
What can you do to maintain a positive culture?
Recessions are stressful times for everyone. Fortunately, there are ways to keep the company culture strong while still making difficult business decisions.
Internal transparency about the organization’s situation may seem counterintuitive, especially to more old-school executives. After all, you want to put on a strong face no matter the struggles, right? Acknowledging issues puts more stress and anxiety on employees, doesn’t it?
Not so fast.
Research indicates that uncertainty is a major cause of stress. If management is opaque or even deceitful regarding the state of the company, it will cause undue anxiety for employees.
Strive to be transparent about changing business objectives. People appreciate honesty and can even help position the company toward better outcomes. It is important to not be hyperbolic or negative but to present reality as it is. Striking this balance is difficult, but necessary to inform your workers about the company’s direction in a clear, concise manner.
An organization’s most important asset is their workforce. Your employees are on the front lines every day, dealing with common issues. They may have cost-cutting solutions that upper management hasn’t considered.
Provide an avenue for employees to give feedback and follow through on the ones deemed useful. The new policies will not only improve the bottom line but involving employees in creating solutions also will increase their overall satisfaction and engagement. Employees who feel heard are almost five times more likely to do their best work. It is a win-win situation to listen to your workforce.
Create Opportunities for Ongoing Employee Growth
A major part of good company culture is providing employees with growth opportunities. During normal economic times, this is a much simpler proposition. According to a LinkedIn survey, nearly 95% of people say they would stay at a company if the organization offered effective learning programs to aid professional growth.
Amid a deep recession, it’s more difficult. Even with frozen or cut pay rates, resist the urge to stall development paths. Continue learning programs and consider low-cost initiatives such as mentorships. That way, learning continues, and when the economy does improve, your employees will be more educated, empowered, and engaged. Productivity is then higher, the business is more competitive and you can compensate your workforce fairly.
Focus on What Matters
Company outings, free lunches, magazine subscriptions are nice to have, but not essential. And in the long run, these little bonuses are much less important to employees than the more substantial efforts mentioned above.
So, if you’re spending a lot of money on employees’ free lunches or subsidizing gym memberships, suspend those programs until better days. As long as you’re transparent and open about the reasons, your workforce should understand. It may even galvanize them, as they could take on an “all hands on deck” attitude. Honesty goes a long way here.
In the end, what employees want is a healthy, productive, and inclusive work environment where their contributions and hard work are recognized daily. As long as you have those core pillars in place, small perks can wait.
We Truly Are All in This Together
With recent surges in COVID-19 cases, along with the uncertainty around a future vaccine, nobody knows how long this downturn will last. The important thing is to keep employees up to date about the company’s situation and do your best to maintain a strong culture. Cut expenditures where you can and lay off employees only as a last resort. Additionally, executives should be on board to take pay cuts or forgo bonuses to maintain a resilient, engaged workforce.
It may be an overused phrase, but we truly are all in this together. Prove to your employees this is the case and show how everyone is making the necessary sacrifices to save livelihoods. In the long run, you’ll benefit from a close-knit company culture that thrives on engagement and honesty.
(With inputs from CMSWire)