The need to prioritize workers over savings in an economic downturn

Christine Tao is CEO and co-founder of sounding boardhelping companies grow their leaders through scalable, personalized leadership coaching

So a recession is coming. Could be.

As a CEO and co-founder, I know how scary the market is right now. My leadership team and I have talked about what could happen for our company if a recession comes along, and we’ve taken steps to make sure we’re ready for what comes next. However, there is always an element of uncertainty, because you cannot solve and predict everything.

Whether you’re in a pandemic, a recession or an economic boom, you need people who can do their jobs well. So even when you need to think more strategically about your budget, growth strategy and business priorities, employee development is not an investment to ignore. In an uncertain market, it’s easy to cut costs, but remember, after every recession comes a recovery. The biggest difference between a growing economy and a declining economy is how you invest your time and money in uncertain times. I advise you not to wait and see what happens.

A 2020 McKinsey report explored what companies did in response to the global financial crisis in 2008 and how to replicate that during and after the pandemic. Those with an action plan prior to 2008 focused on innovation and outperformed the market average by 30%. growth opportunities.

The companies that kept moving forward, that pushed themselves to grow, came out stronger. So it’s a smart move to invest in what the market needs and wants, and also invest in your team so they can meet those wants and needs.

In response to the pandemic, the global economic downturn and the rapid shift to remote workforces, many organizations have increased their investment in leadership coaching. Why? Our research in conjunction with Chief Learning Officer found that nearly 80% of respondents surveyed in 2021 said “the top coaching need was to improve leadership skills for specific individuals, followed closely by developing leadership banking power (69%).”

In addition, 51% of respondents said they offered leadership coaching to increase employee engagement, and 49% of respondents said it was to retain key talent. Even in times of uncertainty, the results of this investment in leadership coaching have been significant:

• “67% said leadership coaching increased employee engagement and satisfaction.

• 60% said it improved employees’ perceptions of leadership quality.

• 54% said it improved the strength of the leadership bench.

• 50% said it improved productivity.

• 44% said leadership coaching improved the quality of work.”

Prioritizing learning can make a huge difference to any organization, even in times of uncertainty and budget constraints.

In times like these, companies demand more from their employees because there are more business challenges. The impact each employee has is greater, especially with managers and leaders. Companies need great leaders, and often, when people leave, the most important reason is their administrator. This is even more true in remote work environments, as people are not as involved across the organization or in senior leadership. Therefore, employee engagement is primarily driven by interactions with their immediate manager. A 2021 Gallup report showed that 70% of the difference between an engaged and disengaged employee comes down to their manager.

It is critical that managers know how to empathize with their teams and how to foster high levels of performance and discretionary effort. To this end, HR and talent leaders should actively promote and apply the four Es:

• Exposure: Provide leaders exposure so they can see how specific work gets done and interact with the subject matter experts doing it.

• Experiences: Stretch them with new experiences that give them opportunities to experiment and fail safely.

• Education: Offer education that broadens managerial paradigms and fosters a growth mindset.

• Surroundings: Provide an environment that offers support and flexibility.

Promoting high levels of performance and practicing empathy also means that leaders must develop best practices. Behavioral science is a great place to start because it can help identify what drives human behavior. It also involves systematic experimentation rather than symptomatic solutions.

For example, behavioral science has shown that successfully producing high-performing teams requires leaders to recognize current tensions, contextualize situations, use intervention processes, and share resources with teams. This requires leaders to take the following four steps.

1. Recognize current voltages.

Leaders need to understand the tensions they face in the workplace. If leaders cannot recognize the source of these tensions, they cannot develop effective solutions. There are five common tensions that typically need to be recognized, understood, and addressed.

• People versus companies

• Flexibility versus scalability

• Perception versus reality

• Expectations versus support

• Data versus intuition

2. Contextualize situations.

Leaders must be empathetic and contextual. What works for one person or team may not work for another. It’s about adapting and looking at the big picture when leading.

3. Use a behavioral science-backed intervention process.

Leaders must be conscious and deliberate when making decisions. They can use behavioral science to understand, predict and influence individual, social and group well-being.

4. Develop talent with customizable, shareable tools.

Use customizable tools, such as coaching, that you can implement and share to help teams integrate behavioral science principles into their day-to-day work.

When – or if – the recession impacts your business, the people who stick around will be the ones who feel truly connected to the organization and to each other. Invest in and develop those people and you will be able to look past the difficult moments to the future, whatever it holds.

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