Dealing With a Downturn: Leading Your Team Through a Recession

By Charlotte Boffey, Head of UK Services at Employment Hero

It’s not official yet, but the Bank of England believes the UK economy is now in a recession – and is likely to stay there for a while.

A recession means the economy is shrinking rather than growing, and for longer than just a quarter. Recessions are never easy for anyone – employees or employers. Across the wider economy, they usually result in job losses, drops in revenue, and reduced investment.

But there are ways for your business to get through such a downturn – and even to thrive.

The burden on your employees

Employees often carry the burden of a recession. Even the ones who will never get close to being made redundant will be a lot more worried about their economic future – especially as costs continue to rise, putting serious pressure on household budgets.

This could easily spiral into disengagement at work, which will hurt your wider business. If your company does have to go through a redundancy round the employees who stay will likely have more responsibility, making them more stressed. The stress of the general downturn – which may make their job far harder – will also add to their stress levels.

Managers will be more stressed too, which could lead to employees being mismanaged. And overall team morale is likely to drop as the budget for engagement events like parties or outings drops.

These effects could all hit your workforce – but you shouldn’t just let them. Here are some ways to combat these issues.

Create a recession roadmap for your staff

There’s no reason to pretend a downturn isn’t happening. Instead, you should create a roadmap to deal with the downturn and its effects on your employees.

At the heart of this plan has to be frequent and clear communication. Make sure your employees know how the wider business is doing so they understand any decisions you make. Create a foundation of trust – where when you explain something to them, they shouldn’t think you are pulling any wool over their eyes. Try to be optimistic about the future – but also realistic.

If possible, involve them in the wider decisions about how your business should get through the downturn. They are on the shop floor – is there a cost centre dragging you down you don’t know about, or an area of the business that is seeing the drop in demand more strongly? They may know before you do.

Remember empathy. The world is a scary place during a recession – there’s no reason you need to be scared too.

Double down on your company culture and values

Through all the stress, don’t forget why your company exists and why your employees want to work there. Remember these values, act on them, and communicate them.

A good culture should encourage a general sense of belonging at work. Do what you can to encourage that, and go beyond just banal statements like “we’re a family here”. Research suggests sustainable diversity, equity, and inclusion (DEI) initiatives will increase overall inclusion by 20 per cent. Here are some tips on creating an inclusive workplace.

Every business can have a healthy company culture, regardless of its size or budget and doing so will do wonders to help your employees through the stress of the downturn.

Reward and train staff

Employees may have to put in extra effort during a downturn, and you should do all you can to recognise that.

Obviously, in a downturn, it’s going to be hard to always give the pay rises or bonuses you might like to give staff, but there are many other ways to reward staff that don’t have to cost as much.

These can include: gift cards, longer lunch breaks, handwritten thank-you notes, actual awards, and additional days off.

You should also not let the recession stop ongoing training and professional development of your staff. A downturn is exactly when you need your team to be more productive – and that’s exactly what training can do. It will also help your staff feel valued.

Employee wellbeing should stay at the top of your agenda. Inflation and the pandemic have already contributed to serious burnout – 54% of UK employees in our recent Wellness at Work felt burnt out. Don’t let a downturn be the thing that pushes them over the edge.