How to Communicate with Your Team During an Economic Downturn?

During a crisis, an employee’s most trusted source of information is often their employer. Transparent, well-timed communication from the leadership motivates and reassures your people. It helps them adjust and adapt faster to the evolving circumstances.

How can business leaders ensure effective internal communications, during a recession?

In this article, we look at:

•      What economic depressions (recessions)?
•      How do recessions impact businesses?
•      What actions can leaders take to ensure effective workplace communications?

Understanding Economic Downturn and Their Effects on the Business

What is an Economic Depression?

An economic depression is a prolonged period of severe decline in economic activity. Economic downturns cause a sharp fall in:

1. Income
2. Market growth
3. Employment
4. Production
5. Wholesale
6. Retail sales

The Impact of a Recession in the Market

The domino effects of a recession impact businesses in different ways. Many companies experience:

1. Decline in sales and revenue that will squeeze profits.
2. Bloated (surplus) inventories due to lower consumer demands.
3. Tightened credit conditions that prevent businesses from accessing the needed capital.
4. Incorporate sudden and expensive operational changes, such as switching to automation.
5. Cut marketing budgets and impose spending restrictions.
6. Control labor costs through layoffs, furloughs, or pay cuts.

Monitoring and Preparing for an Economic Slowdown

Understanding a recession’s potential impact on your business will help you plan the next steps. 

Find out how the crisis has hit your peers in the same industry or sector. Analyze your business cycle by:

1. Talking to your finance team and business mentors.
2. Reviewing current business conditions and developments.
3. Keeping pace with the latest economic and business news.
4. Getting in touch with business support groups.

Additionally, you need to focus on building a team that stands by your side, during both good and bad phases. Effective internal communications help you earn your team’s support and trust.

Preparing for a Conversation With Your Employees During a Recession

When a crisis hits, business leaders have to deal with complex communication challenges. Tough trade-offs persist, and with them come hard-to-announce decisions. Workplace communications should inform, convince, and support people in adverse times.

A reliable, effective crisis communications strategy depends on two things:

1. Facts (proven, valid data)
2. Objectives (focused, achievable goals)

1. Gathering the Facts

Back your communication initiatives with valid data and expert guidance. People trust and follow data-backed decisions. It improves their cooperation with your crisis management measures.

Data shows how human-focused communications enable businesses to storm the weather.

1. 35% of employees appreciate leadership that focuses on people development. They value leaders who spend time teaching, mentoring, and listening to individual needs.
2. 27% expect their managers to communicate in a convincing and charismatic way.
3. 28% seek a team atmosphere that encourages everyone to contribute to decision-making.

2. Setting Clear Objectives

Focused, goal-oriented communications can reduce anxiety and workplace chaos in uncertain times.

1. Be clear on what your organization will achieve during the economic slump.
2. Establish a solid vision for how your business and people will emerge through the crisis.
3. Focus on communications that motivate and support employees.
4. Provide explicit details on the actions employees can take to reduce anxiety.
5. Offer a clear direction for your people to move forward.

Creating an Effective Communications Strategy to Deal With Uncertain Times

When communicating with your team during an economic downturn, focus on:

1. Being Transparent and Honest

Be honest about where things stand, and what is certain and uncertain. Inform people about the next steps you are putting in place. Provide them a behind-the-scenes view of the different options you are considering.

Make room for both virtual and face-to-face interactions, whenever possible.

Share verified time-based updates with your team through your official email. A typical example would be a monthly round-up email from the CEO’s desk.

2. Showing Empathy and Support

Be empathetic when talking to your team. Consider what the person you are communicating with is feeling or going through.

Acknowledge the personal effects of the emotional turbulence caused by the crisis. Share individual experiences that your team can connect with. Post positive stories about resilient survivors that can restore your team’s confidence.

Set up a crisis hotline to reach out and reassure employees working across locations. Appoint well-trained, qualified personnel to handle inquiries.

3. Encouraging Open Dialogue

Make employees feel more valued and appreciated by encouraging open dialogue. It strengthens your team’s loyalty, commitment, and confidence.

Host team events and open communication forums to exchange ideas and feedback. Allot Q&A time for employees to get their queries answered by the leadership.

Give Your Employees Solutions and Next Steps to Combat the Crisis

Encourage your team to pursue the next actions that help them cope with the situation. Approach them with the right solutions that can reduce their fear and anxiety.

1. Outline Your Company’s Plan

Inform your employees how you are planning to cope with the crisis. Tell them what communication channels and strategies you are considering to adopt.

1. Be candid about the changes underway. Tell them how it will impact their current roles and what steps you have taken to address the situation.
2. Ensure you have different channels of communication in place. This will include live chats, emails, video meetings, Q&A platforms, and more.
3. Share organizational decisions and announcements through your official email or company website. Adopt adequate security measures to protect your social media accounts from cyber infiltrators. This will prevent the circulation of rumors and misinformation.
4. Provide customized crisis management training to your employees. Help them deal with the emotional, physical, and financial stress caused by the crisis.

2. Highlight the Opportunities for Your Team

Keep your messages simple, to the point, and actionable. Try to share more “dos” (best practices and benefits) than “don’ts” (what people shouldn’t do). Encourage people to focus on the next steps that help them cope with the situation.

1. Highlight the positives in your message. Emphasize the steps you’re taking to address any issues. Boost your team’s confidence by sharing how you are getting on with the next steps.
2. When bringing up business challenges in your message, focus on the human impacts. For instance, you can say how supply chain disruptions can affect services to people.
3. Use employee feedback to make timely interventions during a business disruption. Give employees different options to share their feedback. Use pulse surveys, anonymous surveys, focus groups, one-on-one meetings, exit interviews, etc.

3. Set Short-Term and Long-Term Goals

Be clear on what your organization wants to achieve now and later. Adjust your business’s priorities by setting long-term and short-term communication goals. For instance,

1. In the early stage of a crisis, communicators should instruct employees how to stay calm and safe.
2. In the next stage, communicators can help employees adjust to change and uncertainty.
3. As the recession’s end comes into view, communications should help people make sense of the crisis and its impact.

Maintaining Workplace Morale and Motivation During an Economic Downturn

In times of uncertainty, employees are often wary of layoffs and pay cuts. Help people understand the situation, without letting them down.

1. Recognize and Celebrate Efforts

Build a team that will stick together during good times and bad. 

1. Recognize and reward outstanding performance, teamwork, and innovative ideas. Back every instance of appreciation with a tangible gift, such as redeemable points.
2. Share professional achievements on your internal communications platform. It will motivate other employees and improve your team’s morale.

2. Provide Ongoing Support and Resources

1. Keep your internal communication channels open to all employees—remote, hybrid, or in-office. Let employees know you are available for them. They will feel more comfortable communicating any challenges to you.
2. Ensure your HR leaders are available during difficult times to support those in need. 
3. Educate people about changes in the company policy. Impart mandatory safety and compliance training for your team for crisis handling.

1. Train your teams in new/anticipated skills and roles, crucial in the post-crisis phase. Provide mentoring or coaching programs at a one-to-one level.

 

3. Keep Communication Open and Regular 

1. Communicate crucial crisis-related messages at regular intervals, without panicking people. It helps employees maximize their perception of the risk.
2. Understand how employees perceive your organization’s crisis management goals and actions. Gather anonymous feedback from employees through regular pulse surveys.
3. Encourage open, two-way communication. Maintain a feedback loop for managers to provide individualized support during a crisis. 
4. Establish learning journals for managers and employees to exchange regular feedback.

Leading with Confidence During Challenging Times

We saw the key factors to consider when communicating with your people during a crisis. Uncertain circumstances demand employees to make some adjustments to their work schedules. Leaders can support the transition by providing employees with learning and development opportunities. eLearning courses accessible from anywhere can guide your teams to thrive on the job. Using a modern LMS, you can upskill or reskill your employees for the future of work.

To sum up, effective internal communications in tough times focuses on two things:

•      How your employees receive or perceive your message
•      What your employees need to know

Getting this right will help make your business stronger and your workforce happier. Talk to our expert to learn more about the role of an LMS in improving internal communications during a crisis.