Economists have warned about an incoming recession for months now.
While the Federal Reserve continues to hike interest rates to cool inflation, Fed chair Jerome Powell acknowledged that this move could lead to economic pain in the future.
Recession impacts more than just companies – the workforce must be ready to adjust as well. This is particularly important for young Millennials and Gen Zers, both of whom have hardly experienced working through an economic downturn.
There are ways for employers to prepare for a recession, but HR departments must be prepared to address the challenges that are likely to emerge from this.
For starters, certain workplace incentives may not be as sustainable as they once were. For instance, providing lavish benefits to attract new talent could provide less value as people have less money to spend.
But this doesn’t mean companies must get rid of incentives altogether. Instead, leaders must find alternative modes of keeping workers engaged that are not financial. For instance, nurturing company culture, providing workers with a clear path to progress and offering one-of-a-kind, fulfilling workplace experiences can all serve as incentives for workers.
Another potential challenge in a recession is increased tension when it comes to remote work policies. Several large companies are eager to bring employees back into the office, but a recession may grow employees’ desire to be in the office as they cling to their wallets.
In the future, leaders must reevaluate which roles are absolutely necessary to be performed in person and which can be effectively done remotely.