Trend #7: Revisiting People Strategies in Times of Economic Uncertainty

 2023 1st Quarter Update

Undoubtedly, the last couple of years has challenged workers economically. Given the stress of economic uncertainty, how can organizations best support their employees as they face inflation, unexpected layoffs, and fears of a recession?

The first quarter of 2023 has been marked by inflation, a sluggish economy, and massive layoffs in the tech sector, including approximately 12,000 Google employees, 11,000 Meta employees (with reportedly more cuts to come), and 2,000 PayPal employees.

So, how can organizations best help employees weather these multiple economic shocks?

In the social media age, Melissa Davies offers some very practical tips on how organizations can communicate and support departing employees and manage the fears of remaining employees.

With stress and uncertainty rising among workers, this article from Psychology Today by Ronald E. Riggio, Ph.D., highlights some of the priorities leaders should focus on to support employees for the moment we’re in: Among these, leaders first need to show genuine care and concern for their employees’ welfare, for example by offering flexible work schedules, work-from-home opportunities, or arrangements to handle family imperatives. Secondly, leaders and HR should not just respond to the context but aim to shape it too, for example, by being proactive in engaging and retaining their best talents, with respect, recognition, and reward.

In a similar vein, and to ensure that the people decisions being taken today help set organizations up for long-term success, Amy C. Edmondson and Mark Mortensen remind us of the importance for HR to help articulate a value proposition that not only addresses the material aspects that might be top of mind for many employees right now, but also includes distinct elements that might be harder for competitors to replicate: Articulate and live a tangible development culture, provide a real sense of community, and a higher purpose that makes people want to get out of bed every morning.

What’s next? In times of economic distress, the traditional response of our economy has been about reducing the costs of tasks, this to immediately make organizations more valuable, not its people. That strategy is likely not going to be revisited for a while. Yet, what if it could? HR can play a key role in progressing a conversation towards an economy that makes people more valuable first. Shouldn’t that be our overarching people strategy in the first place? In their book Disrupting Unemployment, Vint Cerf (co-founder of the Internet) and David Nordfors pave the way for such an opportunity by highlighting how organizations, by helping everyone find a job that matches their skills and optimizes their engagement, could transform dormant human capacity into new wealth: A doubling in world GDP ($75 Trillion) according to their conservative estimate.