5 focus areas for retaining your talents during a recession

Over the past few years, HR has entered a new arena: Hunger Games style. Every business is competing for increasingly limited resources while the clock ticks down.

This is exactly the scenario we discuss in our recent webinar with Forrester, ‘How to drive employee engagement during an economic downturn’.

In the webinar, Winningtemp’s Head of HR, Sara Holmberg, and Principal Analyst with Forrester, Katy Tynan, talk about how the world of work has fundamentally changed, and how organisations must get fast if they hope to get a handle on spiralling turnover.  

In this article, we recap Sara and Katy’s advice and explore five practical focus areas to retain your workforce in today’s landscape:

1.    Genuinely know and care about your people

2.    Focus on culture

3.    Give employees opportunities to learn and grow

4.    Nurture strong but vulnerable leadership

5.    Provide meaning and purpose

Let’s dig in.

1.   Genuinely know and care about your people

Winningtemp data shows that over the past two years, motivation has dropped considerably. By mid-2021, we were seeing some 7-8% less motivation than 2020, for example. That trend is reversing, but as of mid-2022 motivation was still lower than two years before.

For motivation to be long-lasting, employees must be intrinsically motivated by their work. That is, they do what they do because they enjoy it, not because of some carrot/stick rewards and punishment system.

That’s where knowing your people and caring about them as individuals is crucial. What are their values? Goals? Dreams? Strengths? Struggles?

Forrester’s Katy points out how this represents a major shift, away from the top-down, highly structured management that’s dominated in the past. Today, leading organisations are embracing a bottom-up model that starts with hiring people with the right skills, values, and strengths and then enabling them with the support and resources to do their best work.

But this model demands we provide more support to managers. As Katy says, “your managers, especially your frontline managers, need support to do this effectively. They don’t just hop into a management role knowing how to do these things.”

2.   Focus on culture

The average job-switcher sees an inflation-adjusted salary increase of 10%, while the average worker who stays sees inflation-adjusted wages fall by 2%. As cost of living increases continue to bite, it’s fair to say even your most loyal employees are at risk of turnover.

Assuming you can’t afford huge salary hikes across the board (😆),the best way to build a recession-proof workforce is by focussing proactively on your culture.

Organisations should start with a clear vision for their culture, driven by your strategy, needs and goals. Then proactively measure, adjust, and close misalignments.

Katy puts it perfectly:

“A lot of senior leaders make the mistake of thinking culture just arises somehow, magically. Culture can be measured. Culture is about a series of decisions we make every day about how we interact together as people. It’s the way things get done around here. Intentionality is so important – and then the ability to measure those specific KPIs that matter for your organisation.”

There’s no right and wrong, although of course there are factors that always matter, like a culture of inclusion. But the point is, culture is something leaders should proactively design and progress. A strong culture becomes a north star, attracting better-fit employees who are less likely to leave.

3.    Give employees opportunities to learn and grow

Employee development is an open goal for organisations, really. Helping your employees grow is critical to retention, first of all. Some 94% of employees say they’d stay longer with a company that invested in their career development.

And second, it’s a proven tactic to tackle growing skills shortages – and an especially valuable one when budgets are tightening. According to LinkedIn, 79%of L&D professionals think that reskilling an existing employee is less expensive than hiring a new one.

Winningtemp’s Head of HR, Sara, recommends organisations start by understanding and setting learning expectations with employees. It’s also important to give employees control and ownership over learning, through self-leadership tools. This connects to the central idea of autonomy, which is one of nine major factors that influence engagement.

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4.   Nurture inspiring leadership

There’s a deep connection between leadership and engagement. Data shows how the components of value for organisations have changed – from tangible assets like factories and equipment to intangible assets like intellectual property and people.

This shift means the capabilities of a great leader have shifted too. Now great leaders aren’t only sound business thinkers and strategic decision-makers but also excellent people leaders that inspire and engage.

There’s now a need to proactively cultivate leadership like this, focussing on creating psychological safety by nurturing an open, transparent environment. Building a workplace where employees are empowered to share their voices and perspectives– without fear of guilt or blame – instils respect and trust. And ultimately engagement and loyalty.

5.   Provide meaning and purpose

For many employees, the pandemic was an opportunity to reflect on what matters and a nudge to reconsider priorities and values. For example, two-thirds of employees told McKinsey that COVID-19 caused them to reflect on their purpose in life.

This has major implications for business leaders because work is typically a major factor contributing to an individual’s overall sense of purpose.

The upshot is that many employees care more today about meaningful work that aligns to their own values and personal purpose. And in a talent-short market employees have the power to look elsewhere if you can’t provide it.

Purpose and meaning are also especially important when recession looms. When the economy is booming, organisations can hide a poor employee experience behind inflated paycheques and massive bonuses. But when money is tight, there’s nowhere to hide.

Creating a sense of purpose ties back into the first point of this article, about genuinely knowing your people. When managers really understand what drives someone, they can help join the dots between individual and work purpose.

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Less command-and-control. More curiosity-and-compassion.

As we all know, the world of work today is volatile. The pandemic accelerated some big changes that might otherwise have taken years. One of the biggest changes, as Katy describes in the webinar, is the shift towards prioritising human capital, people, as an organisations’ biggest value driver.

Leaders that embrace this shift move away from old command-and-control style leadership towards a more compassionate, curious approach that aims to truly give employees what they need to thrive.

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Watch the webinar now to learn more, as you build your people strategy for 2023 and beyond. ‍‍