A recession is not a retention strategy: How to keep your best people

The Great Resignation of 2021 raised the stakes of the talent war for employers. Now, the landscape is changing yet again. Nearly two-thirds of employers and three-quarters of employees believe a recession is coming, and 45 percent of workers say they fear the difficulty of finding work during an economic downturn.

But no two recessions are alike. Unlike the housing collapse of 2008–2011, when employees tended to stay with their employers even if they were unhappy, the job market in 2022 is still very strong. With an average of two job openings per unemployed person, it’s still very much an employee-driven market—and fear of a recession likely won’t be enough to make your employees stay. In fact, they seem to be doing the opposite—in the same study, eight in ten workers actually reported looking for a new job in anticipation of an upcoming market shift.

With this in mind, what should HR be doing to ensure robust retention today and in the near future?

Start with caring why they stay

Creating a workplace where employees choose to remain starts with caring about why they stay. In dark times, a steady paycheck may be enough—but when the sun comes back out, a job that merely pays the bills won’t keep people on board. They’ll be looking for work that provides not only stability but a rewarding experience that matches their personal growth with increased opportunity.

Helping employees feel heard, providing professional development, optimizing compensation and benefits and caring for mental health all contribute to creating an environment that will keep employees loyal in good times and bad. To prevent turnover, HR should make employees feel secure in spite of the changing world around them and optimistic about what lies ahead.

Bring your employees along for big business decisions

A recession can lead to fear and uncertainty among employees—fear for their jobs, fear of lost income, fear of struggling to find work to support their families. But don’t assume this will make them stay. If they feel their current employer is unprepared for a recession, they’ll look for a more reliable job in advance of possible layoffs. And if they feel unheard and unsupported, they’re going to start looking at employers who demonstrate a culture of communication. Fear and uncertainty can be alienating, but steady, consistent feedback can help reduce apprehension and make employees feel more secure.

By prioritizing transparency and honest communication, you can ensure you’re developing a culture of retention and employee engagement at your company. But feedback only improves engagement if there’s clarity on both sides of the employer-employee agreement— employees know you hear them and everyone knows how the company’s decisions lead to accomplishing your shared goals.

Building for any future

The employment landscape is always changing, but no matter where it goes, being the best option is always better than being the only option. A recession might keep employees from leaving, but relying on the economy isn’t a retention strategy. Whether your company is weathering a recession or dealing with a tight job market (or both at the same time), creating an environment where employees want to stay—versus having to stay—will be the best investment you can make in your future. With a proactive and employee-centric plan, you can create the kind of loyalty that will survive any economic storm.

Leave a comment