As business leaders, financial analysts, and government officials debate whether the United States has entered a recession (or will soon), companies across industries are preparing for the worst. To date, we’ve seen massive layoffs, rescinded offers, and roller coaster stock prices, each contributing to the general feeling of instability currently being felt across the board.
Despite the onslaught of bad news, there’s still a sliver of a silver lining: over the past two years, we have come a long way in terms of progress in the workplace. Throughout the pandemic, companies reimagined how and where work will get done, refocused on retaining top talent, and worked toward establishing a company culture based in trust and vulnerability. These are significant wins.
Now two years into wading through the Great Resignation, the leverage may be shifting from jobs seekers back to employers. With the threat of a recession looming, how can companies navigate a new set of business challenges without undoing the progress made toward a more flexible and equitable future of work?
Our take: Double down on your DEI, company culture, and retention goals.
Equip your HR and DEI teams.
Remember in 2020 when companies made bold statements avowing change following the murder of George Floyd? It’s time to revisit those promises.
According to the Washington Post, “Millennial and Gen Z professionals are avoiding companies without a diverse workforce, clear promotion track and a commitment to confronting systemic racism in their ranks.” Delivering on—or making serious progress toward—achieving your DEI goals can give your company a unique edge in the market. Use this opportunity to capitalize upon the direct correlation between supporting a diverse workforce and increased revenue.
To accomplish this, start by equipping your DEI and HR teams with the tools they need to effectively champion your DEI strategies. Over the past two years, teams that cut HR and DEI budgets struggled the most to pivot, unable to handle the pandemic, shift to remote work, or adequately respond to the difficult conversations surrounding social justice. Without investing in and supporting these functions, your company is ill-equipped to handle new, volatile talent demands.
Implement tools to enhance culture, not take it away.
Culture is the heart and soul of a company. It's what makes employees feel connected to their work, and it's what helps attract—or deter if it is not healthy—top talent. That's why it's so important to implement tools that enhance culture in times of crisis, not erode its psychological and emotional protections.
Many employees have found that there is a connection between feeling connected personally to at least one person at work and being more productive, engaged, and staying at the company longer. Peer-to-peer relationships, mentorships, social groups, and other people-first initiatives—whether in or outside of the workplace—will go a long way toward increasing retention and fostering a healthy workplace culture.
Regardless of whether teams are hybrid, fully remote, or fully onsite, it's important to have a good time at work. Who are the company's most enthusiastic supporters? In your cross-company chat, who is the most active individual? What person would be able to most effectively rally the troops and enhance morale in the office? Find those people, equip them with the tools they tell you they need, and keep track of outcomes.
Retain talent to avoid (even higher) replacement costs.
In the face of the Great Resignation, employers have increased both wages and non-financial perks, including fertility benefits, mental health support, and caregiver leave policies. While we all know that a strong corporate culture is important, financial incentives and perks should not be ruled out. Many employers are turning to traditional methods of recruiting, hiring, and keeping staff such as sign-on bonuses and competitive retirement and health insurance benefits—use them when you can.
If it seems expensive, consider instead the cost of replacing top talent. Due to inflation and heightened benefit demands, talent costs have risen significantly. According to the Predictive Index, a single resignation now costs an organization around $11,372 per employee. On average, turnover has been 20% over the last six months, according to this poll by Predictive Index. So, if 200 individuals leave a company with 1000 workers, that will set it back about $3 million.
Upwards of 70% of companies were failing to keep good employee morale at the start of the pandemic. The fight continues today, over two years in. Companies with strong DEI policies, company cultures, and retention strategies will naturally encourage creative thinking, foster individuality, stimulate entrepreneurship, and inspire innovation especially when there’s a need for resilience—which is now.