Three Ways to Thoughtfully Invest in People During an Economic Downturn
By Tim Butler
Shortly after graduating from business school, I visited with the CEO of a company I had worked for while in college. This savvy businessman built a thriving network of incredibly successful companies from a small feed and grain business he had inherited from his wife’s family. There were several things I loved about working for that company, including employee care. Our conversation quickly went from catching up to my business school education. He asked me a very pointed question: “I’ve been wondering, did you learn anything significant in business school that you hadn’t already learned while working for our company?” While there were clearly many important areas of learning that occurred during my graduate education, my answer was simple and straightforward: “Yes, but not when it came to the basics.” “And what are the basics you learned at our company,” he asked? I answered, “The importance of gaining a deep industry knowledge and how to take care of your employees.” He responded, “Exactly!”
Much information is available on acquiring industry knowledge, but little on how to build a caring culture. One of the pandemic’s many outcomes has been the swift economic downturn, which is causing anxiety at every organizational level and resulting in the need for leaders to pay special attention to employee concerns.
Typically, when it comes to investing in employees, leaders have focused on benefits: outstanding healthcare, paid parental leave, adequate vacation time, and generous retirement plans. More recently, with the rise of the high-tech culture, other benefits have sometimes been offered: casual dress codes, flexible hours, work from home options, gym memberships, and meals, to mention a few. While some of these benefits are essential and others are attractive, there are three fundamental ways leaders should be investing in their employees during times of economic stress:
1. Make employees your top priority: The smartest business strategy for leaders in any company or industry is to ensure their focus is on their employees. When leaders take care of employees, employees take care of customers. It’s that simple. Effective leaders invest in their employees by going above and beyond to find out what motivates and stresses them, especially during an economic downturn. No marketing strategy or advertising campaign will ever have a greater impact on customer satisfaction than engagement with a company’s happy and engaged employees. And, employee satisfaction has a direct impact on a company’s reputation in the market, enabling them to compete for the best talent.
2. Listen with compassion: Most leaders are quite good at communicating the company’s strategy and policies to their employees, but struggle with compassionate listening and showing vulnerability. Add a downturn in the economy, as precipitated by the current COVID-19 crisis, and the need to survive in an already volatile, uncertain, chaotic, and ambiguous business environment creates additional stress on leaders. This can result in less engagement with employees exactly when more is needed. After all, everyone at every level within a company has concerns and may be anxious about the economic impact on the company, their jobs, and their lives. Therefore, effective leaders take the time to listen to their employees’ concerns and demonstrate empathy and consideration for their opinions.
3. Keep them “in the know”. During an economic downturn, however, most employees share common concerns. Is our industry in upheaval? Is our company solvent? Is my job safe? Sharing as much information as possible, as early as possible, about the impact of the downturn on the industry and company, as well as any plans to meet these challenges (especially including information about reorganization or downsizing), is essential for employee morale. It is commonly known that, in the absence of information, employees tend toward the “worst-case scenario.” This lack of data can have a severe impact on their motivation and engagement with customers, which can cost companies dearly. Add to this the current challenges posed by COVID-19, including what the new work environment will be like and how proposed phases of returning to the office will impact them. Employee anxiety is likely to be quite high. Therefore, effective leaders need to invest in their employees by taking their concerns seriously, whenever possible.
Beyond these steps, managers should be virtually, if not physically, available and present for their employees. We know that social support can help people cope with stress, so social distancing needs to be more about physical separation than social or psychological isolation as we deal with this pandemic, and the economic downturn.
For more practical tips and information on investing in your team throughout the entire employee lifecycle – selection, development and transition, please visit our Insights and Resources page.
