Ravi Punn Employee Benefits Consultant
Nearly everything in your business can be duplicated - products, infrastructure, services - but what about your people?
When we think about what really drives a business forward, it’s not the lifeless elements. These things are important, but it’s the human aspects, the intellectual capital within an organisation, that will make the difference to how well your organisation weathers financial turbulence.
Enacting positive change and prioritising wellbeing
The focus during a recession needs to be about being agile, and open to change, rather than rigid and inflexible. Recessions affect all aspects of a business, but if managed correctly from an HR perspective, it can be an opportunity to enact positive change in the long run. If we look, for example, at the change bought about by the pandemic, we can see that a mental shift took place - moving away from the rigidity of working within a fixed location, and rarely checking in on employees, to a largely dynamic, hybrid working environment. The themes of burn out and cognitive overload underpinned our response to the pandemic, where we began to realise the impact a business can have on the wellbeing of its workforce, and we noticed that the organisations who prioritised the wellbeing of their workforce came out of the pandemic stronger, with a renewed resolve to working.
Cutting your people costs during turbulent times is a mistake
Typically, when we move into an economic downturn, businesses are quick to cut costs, particularly within the HR sphere, and it’s often seen as the time for layoffs. This is a common mistake that businesses make, where they focus too much on the tangible revenue (that is the sales coming into the business) compared to its overheads. We all know that people costs are one of the largest overheads a business has, but what is the impact of forgetting that your people ultimately drive your business forward, and instead of seeing them as invaluable partners to the success of your business, you see them simply as another overhead?
Disengaged people mean lower productivity
According to Vitality’s 2022 ‘Britain’s Healthiest Workplace’ survey, 20.2% of your annual payroll is lost due to employees working, but not being productive. This represents the loss of 51 productive days per employee, per year, with this figure being worse for lower income workers, younger employees and women. The impact of not addressing employee concerns is far higher than employee costs, through increased absenteeism and turnover, as well as far lower employee commitment, the costs to train someone and all other knock-on effects when someone leaves, and is replaced, in a company.
People need more financial support from their employer
From a financial perspective, employees are feeling the pinch. Wages have not been increasing in line with inflation, and, it’s becoming far harder for money to stretch as far as it once did. A simple illustration is to look at how much you could put in your supermarket grocery trolley during the summer, compared to how much you can currently. Yet this comparison doesn’t take into account the bigger picture, of mortgage rates increasing, gas and electric bills soaring, as well as fuel increases and other essential spending. So it comes as no surprise that we are in a situation where employees are asking for more, and where we are hearing about strike after strike in the news. The real question though, is whether it is viable and reasonable for companies to continue to increase salaries, as a way of trying simply to react to a problem, rather than to be proactive about it.
You need to do more… not simply spend more
So how do we deliver more, without spending more? We need to view our workforces in a brand new light, where we understand and recognise that every person in your team, in your business, has their own motivations to do a good job. We need to be efficient in our approach going forward, and need to safeguard the talent we have. Consider what you do for your employees, what benefits are in place, and how you support them. How are you making them want to stay with you, and for them to want to perform to their best, rather than just simply hoping for the best, and reacting impulsively when it doesn’t happen?
Find out more at our special webinar
When we go into this recession, I want you to ask yourself - are you simply doing more of the same, or are you truly enabling your teams, to really get the most out of them?
On Thursday 8 December at 10am, I’ll be hosting a special webinar where we’ll help you to discover the answer to this question, and explore how businesses can attract and retain talent during a recession. In this session, we’ll cover:
- Why managing your people is crucial to the resilience of your business
- How you can reap the rewards of getting it right
- Three ways to become a destination employer during the recession
- Live audience Q&A