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How Employers Can Navigate Workforce Strategy Through a Recession

The United States is entering its third consecutive year of acute economic uncertainty. Inflation remains historically high, the country’s labor shortage remains severe, and there are widespread predictions of an economic recession in the near future.

This combination of factors is highly unusual – typically, economic turmoil causes the demand for labor to drop, which results in employees deciding to stick with their current employer at all costs. However, it appears that titanic turnover levels, high inflation, and low growth will continue to coexist for the foreseeable future. So, how can employers torn between the conflicting demands of a down economy and red-hot labor market set themselves up for success?

The answer is to focus on a total rewards approach that includes benefits, compensation, recognition, and opportunities for career growth. Building a multifaceted employer value proposition and becoming an employer of choice may not be easy, but it is the most surefire way to weather today’s difficult business environment. The following strategies are some of the ways that employers can begin their optimization journey:

Recognize Your Company’s Individuality

As an organization, ask “what are we known for” to get started. Are we known to advertise job openings as “fast-paced environment looking for individuals who are driven and self-motivated?” In other words, your organization is chaotic with little-to-no supervision and minimal direction. For most viable candidates, this sounds like a hard, NO.

Conversely, maybe your company is known to attract top talent because of its reputation for growth and opportunity. If you haven’t figured out the individuality of your organization, now is the time. This will set you apart from competition.

Build an Employee Value Proposition Unique to the Culture

Let’s be clear, an employee value proposition goes hand in hand with an organization’s brand and culture. While competitive wages are important, it is not the sole driver of recruiting and retaining talent. Building an EVP that is credible and visible allows organizations to remain a viable option for candidates over and above salary alone. According to research from Gartner, “Organizations that effectively deliver on their EVP decrease annual employee turnover by just under 70% and increase new hire commitment by nearly 30%.”

Streamline Recruiting and Retention

Have a plan. Streamlining recruiting and retention efforts should be intentional and not reactionary. Recruiting should include strategic planning that incorporates efficient onboarding and data- driven exits. Focus should include diversity and inclusion.

This could be in the form of partnering with non-profits whose mission is helping retired military transition into the workforce. For example, hiring a senior-level sergeant with management skills, without a four-year degree. Building a team where individual strengths and expertise are heterogeneous, lends diversity to ideas. Such teams are robust, sustainable, and successful, regardless of economic environment.

For more information on the systemic trends and forces that are impacting employers, check out the Demographic Drought whitepaper.