Cost-of-living | Supporting your employees through tough economic changes

Supporting your employees through tough economic changes

It’s been a tumultuous period in British politics. Liz Truss’ short stint as Prime Minister and the now infamous mini budget saw money markets panic, and economic policy shift at rapid speed.

These events occurred during an already bleak economic outlook with high inflation and soaring energy bills making the cost-of-living more expensive for everyone.

Events like these affect all of us, and business leaders and HR departments will have no doubt noticed that rising uncertainty is starting to take its toll on its employees.

Why? Because periods of economic uncertainty give rise to stress and anxiety. Employees in sectors who are likely to be more affected by a recession will be worried for their future job prospects. That’s despite unemployment being at record lows and the narrative in certain jobs markets being about businesses crying out for more staff in the last year.

So how can working during periods of economic change affect employees at work, and what can organisations do to help mitigate this?

How uncertainty, stress and anxiety affect work

There aren’t many employment-related touchpoints that increased uncertainty and stress don’t negatively impact.

Almost 20% of the US workforce is already battling an anxiety disorder, and decades of research on anxiety and employee behaviour shows how work can become miserable and seem impossible when staff become too anxious. Little tasks become big problems, and big problems become insurmountable roadblocks.

These feelings can easily become entrenched, making staff more irritable, less focused, and instil a fear of failure that can stifle creativity, problem-solving and collaboration.

Anxious employees are also more likely to leave their job, resulting in higher turnover and recruitment-related costs for organisations. The recent rise of ‘quiet quitting’ and disengagement behaviours also negatively impact output, productivity and outcomes.

Overall, there are serious negative consequences for both employee, and employer. Increased stress and anxiety see staff step back (and potentially leave), whilst for workers, prolonged periods of work stress and disengagement can cause career stagnation.

Supporting employees and allaying their fears

Organisations therefore have two imperatives to help support its employees’ emotional wellbeing at times like these - first, because it’s the right thing to do. And second, because failing to do so could lead to the negative outcomes previously outlined.

But there are some practical and immediate steps which businesses can take to help allay employees’ fears and tackle economy-related concerns head on.

Strong internal communications

Anxiety and stress are often derived from uncertainty. Staff are worried for their long-term financial security, and talk of an imminent recession will bring back memories of the 2008 financial crash for most millennial-aged workers.

Effective and transparent internal communication has a vital role to play when it comes to heading off this uncertainty.

Regularly talking to employees about company-wide performance, successes and plans for the future will help to instil feelings of security in staff. Being honest about challenges faced, and detailed in how leaders are going to mitigate the potential outcomes of those challenges, will help to put employees’ minds at ease that management recognises the challenges and are doing something about it.

Silence from management within a tough economic environment will be deafening for staff and create a vacuum where doubts and anxiety can creep in.

So talk to your team often, let them know the challenges, and re-share the long-term vision to keep everyone pulling in the same direction.

Compassionate leadership

The primary task of people leaders within organisations is to drive performance, meet objectives and surpass targets. And over the last decade, the responsibility for the emotional wellbeing of their team members has, importantly, been added to the mix.

Compassion is a critical skill for leaders during times of change. The term itself can be defined as ‘a sensitivity to suffering in self and others with a commitment to try to alleviate and prevent it’.

For leadership right now, being able to stop when employees are struggling is important. Many will recede within themselves when stress and anxiety take hold, and in many workforces, the negative stigma around mental health remains entrenched.

And the last part of that definition is also crucial - ‘commitment to try and alleviate and prevent it’.

Compassionate leaders don’t only recognise when their people are struggling or their behaviours change, but they also resolve to do something about it. Through careful listening, understanding, empathy and support, people leaders can help workers to feel valued and respected, and help combat the onset of any disengagement.

Direct mental health support

Anxiety and stress are mental health issues. Stress can be more fleeting, and can sometimes be harnessed to improve performance in short bouts (think how your own productivity can increase when working towards a tight deadline, or how much more you prepare for a critical meeting). But anxiety is far more stubborn, and as mentioned above, millions of workers are already battling with it every day in the workplace.

Therefore, offering staff direct mental health support through different schemes and initiatives is a sensible next step, and weighed against the cost of inaction for an organisation, can even provide a positive return on investment.

Many popular work-based mental health schemes, including psychology support apps, physical exercise classes, mental health days, flexible working/schedules and even office pets have all been widely adopted over the last five to 10 years as organisations begin to recognise just how intrinsically linked mental wellbeing and positive work outcomes are.

Understanding how your employees are feeling right now

To help assess the levels of stress and anxiety within a workforce at any given moment, it’s important to measure the experience of employees.

Frictions in the day-to-day workings within a business, from poor technology and outdated platforms, to sluggish recruitment and onboarding procedures, can all negatively impact the engagement and long-term stress employees experience.

Download now: How to benchmark HR software

At Phase 3, our employee experience review services help organisations to understand their candidate-to-employee journey, the employee experience once in situ, and looks at how your current technology infrastructure and HR procedures are supporting employees to deliver their best work.

This analysis of your employee experience will enable the organisation to maximise the use of their technological stack to achieve a frictionless process that staff will expect.

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