Recession? No Sweat. Here’s How to Create a Culture to Withstand Economic Downturns:
In 2009, the global economy was reeling from one of the most damaging recessions in history. People were scared, and many faced the prospect of losing jobs and homes.
Fast forward a decade or so, and now another recession appears to be looming. The same anxieties are surfacing, and many people have yet to fully recover from the last one. Many companies had to let people go in order to stay afloat, and every such cost-cutting decision impacted company cultures.
At CHG Healthcare, we were likewise forced to make hard decisions during the recession. However, we also knew that protecting our culture was key to overcoming the downturn. That was our line in the sand. CHG’s defining core value is putting people first, and we would not sacrifice that just because times were tough.
It was a challenging year of great uncertainty, but by turning to our employees for suggestions, we managed to find more than $2.5 million in cost savings. We actually increased profits, although very modestly, in a year in which our sales decreased. Most importantly, we did not have to lay off employees that year and instead used attrition to lessen the number of employees. Our team discovered that we could make our culture more recession-proof and succeed in any market condition by working together.
CHG was able to save jobs and help employees by being transparent, creative, and fearless. As other companies scramble to prepare for a potential recession, the lessons we learned from 2009 can help them create recession-proof cultures, too.
It can be easy for leaders to keep silent about the finances, plans, and welfare of the company. Whether the outlook is good or bad, many executives seem to think that hiding the big picture will help employees focus on their jobs.
This is the wrong approach. Transparency is essential to maintaining trust across any organization. When leaders are up front and honest, their people will feel respected and be more willing to help solve problems. Employees will inevitably discover or infer what is happening, anyway. Transparency will make sure they are armed with the facts instead of indulging in speculation.
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Enlist Help From the Whole Company
Budgets must shrink and belts must tighten when the economy takes a downturn. We believe that all employees will understand this necessity, particularly if leadership continues to be transparent. By asking and listening across the entire organization, leaders can enlist their people’s help in deciding what must stay and what can go. When leaders look to employees for feedback, they can more easily identify things that can be cut without too much of a negative impact on employees.
Our leadership rallied the entire organization and asked our 1,440 employees to brainstorm and take action. They submitted more than 1,500 ideas and shared their willingness to reduce salaries or forgo benefits and resources so people didn’t have to lose their jobs in the event that layoffs would occur.
Don’t Be Afraid to Cut Perks
We have a lot of fun perks that help enhance our culture, including game rooms, snacks, healthy incentives, and team activities. Our employees enjoy taking advantage of these opportunities, but we also know they’re not the most important drivers of engagement. In 2009, we learned that employees are willing to lose the perks when the economy falters.
Keeping people engaged during tough times requires investing in meaningful things that create lasting engagement. Helping people find purpose in their work and building a team environment based on trust are far more important than fun, replaceable perks. Nobody should be let go so the company can still have catered lunches, provide snacks, or get a new ping-pong table. Your employees don’t want that outcome, either.
Continue to Let People Grow
Losing programs and perks may be inevitable during a downturn, but people still need the chance to grow, develop skills, and be recognized for their hard work. Although leaders may have to cut back on training programs and travel budgets, they can still look for training opportunities close to home and mentorships within the building.
Continuing to let people grow also signals that leaders have faith in the company’s ability to survive the downturn and thrive in the long term. People should be rewarded for their trust in you during times of great uncertainty.
No one looks forward to an economic downturn, but when people pull together to create solutions, companies empower them to take ownership and build deeper, more meaningful relationships with their coworkers. Plus, this course of action shows employees that core values are more than just a poster on the wall — they are what the company lives by.
Kevin Ricklefs is chief culture officer at CHG Healthcare.