Know how to keep staff engaged during a recession

The recession shows no sign of abating. Jittery employees are looking over their shoulders, convinced that every envelope marked ‘internal’ contains their P45, while senior managers are nervously skimming the business pages and wondering how many staff they’re going to have to axe.

And when people are worried about their own financial security, they’re unlikely to be giving their job sufficient attention. Derek Irvine of recognition solutions provider Globoforce points to the recent Towers Perrin global workforce study, which reported that almost four out of five workers are not performing at their optimal level, with two out of five “checked out”.

The threat of recession has exacerbated fears and by distracting staff, has already hit employers where it hurts – productivity. According to Irvine: “Companies with high employee engagement show a 50% differential in operating income over those with low engagement scores, making engaging employees critical for company success – especially when a company is struggling for margins during an economic downturn.”

So how to keep your staff engaged? Simple – by rewarding them well, and by showing that you appreciate their efforts.

Avoid knee-jerk reactions. Don’t start making people redundant at the first sign of economic turbulence. If you really do think that you will end up letting staff go, make sure you lose the people you can most afford to lose. Work out who the organisation needs most, and if you don’t have a succession pool, draw one up.

Keep an eye on your competitors – good staff will be at a premium, and they may be keen to poach yours. Think about the long term. How long do you expect the downturn to last? How many people will you need when times get better? Many companies get rid of good staff and weather economic downturns, only to find themselves short-staffed once the economy has recovered and forced to hire second-rate people.

Make a point of communicating more than you would during financially robust times. Employees will be worried, and you will need to reassure them. But if redundancies are on the cards, you should say so. Keep staff up to date with developments and, above all, tell them that you recognise and appreciate their efforts – and their loyalty. ‘Business as usual’ might be a cliché, but that’s exactly what you need to maintain. You won’t engage your staff unless you keep them fully informed about the situation.

This means more than sending out all-staff e-mails. Get people together for question and answers – and ensure senior management are there to discuss employees’ concerns. One of the most distracting aspects about a poor financial climate is the uncertainty. If you can’t allay staff’s fears, at least tell them what you know.

Don’t underestimate the importance of non-financial rewards. For example, one of the worst things you could do is to cancel the staff Christmas party to save money. What sort of message does that give to employees? If you must cut costs, think about other ways to make your staff feel that they are still worthy of perks – such as extra holidays or more flexibility around their working hours.

Staff who stay with you throughout a recession will be more engaged and have greater company loyalty than those recruited afterwards, so make sure you continue to reward them well once the economy has picked up.

If you only do five things

1. Avoid panicking

2. Think long term

3. Engage with your employees

4. Check what competitors are offering staff

5. Keep your staff up to date.

For more information

Expert’s view: Derek Irvine, vice president, global strategy, Globoforce

What are the biggest challenges?

The primary challenge during a recession is that employees have long memories. Those who survive layoffs are the talented high-performers that companies want to keep. However, once the market recovers, those employees will remember how the company treated them and their less fortunate colleagues, and may leave for a more appreciative work culture. HR must manage strategically so that the right people remain in the right jobs when the market turns.

What should you avoid doing?

Never stop communicating. During a recession, employees tend to focus more on personal job security than the task at hand. Keep all employees engaged in daily efforts by communicating the reality of the situation and how this affects company goals. Communicating the objectives and vision of your company during a downturn will provide a sense of security. Make your commitment to your employees clear by keeping a strategic recognition programme running smoothly, rewarding them for actions aligned with company objectives and vision.

Top tips

  • See employees as people and assets, not costs. By engaging employees fully in their work, leadership derives additional value from their efforts. Clearly define employee-specific roles and expectations that are tied to overall department, division or company goals.
  • Build a culture of appreciation. Reinforce the difference that employees make every day in helping the company meet and exceed its goals. Communicate this effectively through a strategic recognition programme that explicitly links company values and goals to the employee behaviours being recognised. This helps employees see how their daily efforts contribute to the company achieving its goals.
  • Boost performance through recognition. Consistent, appropriate and frequent recognition encourages increased employee performance. The return on investment (ROI) resulting from a recognition programme – best practice suggests at least 1% of payroll – tends to be considerably higher than the return from stretched annual merit increases. After reducing annual increases to the minimum, companies should reinforce their psychological contract with employees through a recognition programme.
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