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How Employers Can Navigate Workforce Strategy Through a Recession

Why Inflation Will Likely Keep Prices Above Pre-COVID Levels

The bad news on inflation — it isn’t slowing down. Tracking at 9% year-over-year, inflation hasn’t been this high since the 1980s. This has stymied economic growth and crushed financial markets. According to The Economist, consumer confidence in many places is lower now than it was in the early stages of the COVID-19 pandemic.

While there are signs of some inflationary deceleration (shipping container costs – Shanghai to Los Angeles – have fallen 25% since March, continues the article), inflation’s impact looks lasting. There are effective methods regarding how employers should respond, especially when considering a recession. Looking back at the last time the U.S. experienced high inflation – post 2008 financial crisis – key themes from successful companies included:

  • Focusing on profitability (cash is king)
  • Leveraging technology
  • Strengthening the workforce

Strengthening the workforce does not solely mean higher wages. A “total rewards” approach wins in the long run. This includes benefits, compensation, recognition, flexibility, and career opportunities.

The following strategies can help employers identify their optimal mix:

  • Recognize your company’s individuality
  • Build an employee value proposition unique to your culture
  • Streamline recruiting and retention

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 (EVP) 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.

Going Forward

An inflationary environment is new to many HR professionals. The current workforce is altogether different. Navigating these changes requires speed, partnership, and expertise. Employers who take proactive approaches will win.

Interested in more financial wellbeing content? Check out Why You Should Continue to Invest During Inflation.