Your company culture could help you deal with a recession in 2023

01 April 2023 Sharyn Waterworth

Your Company Culture Could Help You Deal With A  Recession In 2023

​Will Australia face a recession in 2023? In the midst of slow economic growth, experts are yet to agree on an outcome. According to the Commonwealth Bank, we should narrowly avoid a recession in 2023, while other sources remain uncertain, saying the likelihood of a recession has increased.

Either way, everyone agrees growth is slowing sharply. And with our country’s economic future hard to pinpoint, employees are likely to react in one of two ways.

  1. They may become stressed and anxious due to looming job insecurity — deciding to batten down the hatches and ride out the economic downturn with their current job.

  2. With the continually rising cost of living pressures, they may either ask for a raise (which you may or may not be in a position to grant) or look for a higher salary elsewhere.

Has an employee asked you for a pay rise? Here’s how to handle their request: An employee has requested a pay rise — now what?

This puts employers in a tricky situation — with so much financial stress and uncertainty, how can you keep talent engaged and committed to your company?

The answer lies in a culture-first approach.

Among so many unknowns, what you can control is cultivating a positive working environment. However, when times get tough, maintaining your company’s culture may fall to the wayside in place of prioritising day-to-day tasks that are considered more urgent.

Here’s why you shouldn’t overlook the importance of your company culture, and the significant role it can play for your company during an economic downturn.

Why your company culture is even more critical during a recession

A healthy company culture is imperative to a company’s success and growth under normal circumstances. It’s directly tied to employee engagement and well-being, which can severely impact turnover rates and productivity (and in turn, profitability).

This is even more true during times of stress and anxiety. Building a strong foundation you and your employees can rely on is important for everyone’s security and ultimately, business survival. Here’s why.

  1. You want your employees to be productive

Your company culture influences employee productivity and whether they are focused on achieving their work-related goals, or if they’re easily distracted and unmotivated during work hours.

With a recession comes tighter resourcing, so it’s important your employees are completing work and not spending precious time on trivial tasks (or scrolling Facebook).

It’s difficult to implement this expectation if your company hasn’t put an emphasis on efficiency before, which is why it’s better to start building this into your culture now before workers have inflated workloads and are taken aback by the sudden change in pace.

In saying that, it’s important to have realistic expectations — one person can’t, nor should they be expected to, take on the responsibilities of a whole team.

It’s not up to your employees to carry that pressure, but an efficient, focused workplace will certainly better prepare employees for work-related challenges during a possible recession in 2023.

If you do find your employees to be generally unmotivated towards completing their work in a timely manner, we would recommend assessing your company culture as a whole.

Rarely is this a case of workers being “lazy”. In our experience, employee productivity is greatly influenced by how valued and included they feel in an organisation.

To learn more about workplace culture and what aspects of the workplace affect it, read: What does workplace culture mean?

  1. You want your employees to be committed

A strong culture cultivates loyal employees who are willing to stand by their company when times are tough and work hard.

An unprecedented event has the potential to bring your team together, or demonstrate its weak points.

If employees don’t feel valued or happy at work, why would they feel compelled to put in extra effort to help the company and their colleagues when they need it most?

  1. You want your employees to trust you

With apprehension around job insecurity at an all-time high during a recession in 2023, you want your employees to feel like they can trust you. This means fostering an environment of honesty and transparency.

Want to learn more about trust in the workplace? Read: How to build trust in the workplace (and why it’s essential)

There’s nothing worse than feeling out of the loop or like decisions are being made without your input, behind closed doors. Trust is integral if a company needs to be able to pivot and adapt to changes quickly.

Openness demonstrates respect, and when people feel respected and included, they're more willing to follow you — even if they’re not sure about the outcome. As long as you have their best interests at heart, they'll take the leap.

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