Quick look: Business leaders are bracing for a potential recession heading into the new year. These uncertain times can feel intimidating, but the transition doesn’t have to solely represent a decline. Executives have a chance to recalibrate and work with HR experts to maintain momentum toward their goals.
Challenges are nothing new when it comes to company growth, especially for small- and medium-sized businesses (SMBs). However, these are heightened in the wake of a recession. Many fear cutting costs is their only solution, though others are strategizing ways to forge ahead despite the downturn.
A recent PwC pulse survey gathered feedback from executives to uncover where their existing priorities lie. 81% feel they have to make sacrifices through cuts, starting with layoffs and hiring freezes. While these actions are one way to eliminate spending, it’s often only a temporary fix.
In fact, the survey also indicates 44% of business leaders plan to hire specific talent necessary to drive growth, while 35% are considering the possibility of mergers and acquisitions.
Without knowing how long a recession will last, it’s best to have long-term strategies in place to weather the storm. Instead of scaling back as the primary strategy, it’s smart to optimize the advantages already in place. Here are five ways for SMBs to get started.
1. Preserve company culture
A key part of recession-proofing a business involves preserving the company culture. This begins with maintaining employee engagement and satisfaction through transparent communication. It also includes determining areas of improvement through employee surveys and one-on-one meetings. Additionally, offering flexible schedules, remote working conditions, and regular recognition can all factor into boosting employee morale.
Investing in the needs of current employees can improve the retention of high-quality talent while mitigating hiring costs. Otherwise, SMB employers may face spending anywhere from $4,000 to $20,000 per hire depending on the position, an amount which doesn’t include salary or benefits. Furthermore, the time and resources necessary to onboard new employees can limit productivity during a time when clients need attention most.
2. Maintain client relationships
In addition to maintaining strong relationships with employees, it’s important to focus efforts on upholding client relationships as well. While the immediate reaction may be to ramp up business development, it’s usually not the most viable strategy during a recession. The cost of securing new clients can be less profitable than maintaining service to existing ones.
Identify ways to show client appreciation and/or improve client satisfaction. Reassess their goals and provide ways you can offer additional value. Are there supplementary services to propose which would simultaneously benefit their present needs? Have there been personnel changes in their company requiring a re-introduction to the team? Keep client relationships strong by personalizing the experience ensuring expectations are aligned.
3. Promote wellness programs
Even though businesses may be in a recession, individuals are getting hit hard too. In addition to financial strain, the emotional toll on their mental health can be exacerbated during an economic downturn. To provide support and keep employees motivated and engaged, many SMBs offer employee assistance programs (EAPs).
An EAP delivers confidential wellness services ranging from anxiety management to short-term counseling to financial and legal assistance. It connects employees and their dependents with real-time solutions on a broad range of topics, which also include reaching personal milestones and workplace success. Unfortunately, these benefits often go overlooked. Encourage employees to use the resources available to them to help boost morale, alleviate stress, and improve productivity.
4. Upskill current employees
Investing in employees through upskilling and reskilling can make companies more adaptable as business priorities shift. Focus on the benefits of internal mobility and how developing the potential of current employees can help strengthen a company’s positioning in the future. Being proactive also improves retention by empowering employees to create greater opportunities for themselves.
Data shows 68% of workers would stay with an employer throughout their career if the employer upskilled them. Implementing these types of opportunities gives employees purpose, which in turn, strengthens their relationship and loyalty to the company. During uncertain times, providing clarity and possibility regarding job roles is increasingly important. Providing employees a pathway to professional advancement shows a company’s commitment to their growth.
5. Engage in a PEO solution
It’s normal for SMB leaders to hesitate when it comes to any additional spending when preparing for a recession. Yet, the right kinds of investments can actually save time and money needed to prevail. A professional employer organization (PEO) solution through ExtensisHR alleviates the HR burden from SMBs so they can focus on sustaining profitability and growth.
The full suite of services and responsibilities includes recruiting and retention, benefits review and implementation, and creating efficiency through technology, to name a few.
Recruiting and retention
Recruiting and retention require constant oversight and not all PEOs deliver on this need. Whereas, ExtensisHR provides full-cycle recruiting with a 45-day recruiting solution at no additional cost. SMBs benefit from phone consultations with recruiting specialists, job advertisement guidance and creation, and offer letter consultations, among its many exclusive services.
SMBs across all industries are faced with the challenge of offering competitive benefits without incurring exorbitant costs. ExtensisHR offers access to premium benefits from top providers at competitive prices. Having a PEO partner invested in the specific needs of your workforce will create more relevant and cost-effective opportunities.
Through ExtensisHR’s proprietary platform, SMB leaders can securely access HR tasks at their convenience wherever they may be. These tasks include handling payroll, benefits, recruiting, and compliance. The mobile-first technology simplifies administration, improves communication, and streamlines productivity and performance.
Guiding your company through a recession can pose a lot of concerns. Get the personalized support, resources, and experience you need to stay competitive during the most challenging times. Learn more about how our PEO solution can benefit your business. Contact ExtensisHR today.