Economic recessions can present numerous business challenges, including declining revenue, cost-cutting measures, and layoffs.
In times of economic downturn, workforce leaders can easily overlook the importance of maintaining a strong company culture. However, company culture can be your business’s north star to survive recession chaos.
On Season 5, episode 8 of the Survive and Thrive Podcast, host Jennifer Ayres discusses the importance of maintaining a strong company culture to recession-proof your organization. From fighting decreases in employee morale to improving your team’s performance, read on to learn how a strong company culture can help businesses survive the recession – and how leaders can harness the power of this vital resource.
Why Culture is Critical
Culture is a common topic on the Survive and Thrive Podcast — and for good reason. A business’s company culture can significantly impact its ability to fight through harmful roadblocks – which can be even more common and detrimental during an economic recession.
Economic downturns affect many areas of business — and personal — life. Already inflation spikes and increased costs have both citizens and companies in a state of stress. And while re-budgeting can ease financial hardships for a business, failing to dedicate the time and resources necessary to support the staff can be detrimental to your company culture.
According to The Harris Poll: Recession Watch and Workplace Behavior Snapshot, a survey conducted online within the United States by The Harris Poll on behalf of Justworks from January 19-23, 2023, over half (52%) of employees are worried about worsening company culture during these uncertain economic times.
But what does this mean regarding a business’s resilience?
Recessions are periods of unpredictability, and to ensure that a business can stay afloat, productivity is of the essence. This means hiring and retaining engaged employees with the desire and capacity to remain productive.
However, anxious employees cannot be as collaborative or productive. With workers concerned about mass layoffs, unemployment, and budget cuts, leaders need to consciously boost employee morale and support their staff’s well-being.
Facilitating a culture of trust, openness, and encouragement can support a healthy work environment and provide your team with a sense of safety within the workplace so that they can maintain productivity when your business needs it most!
Recession-Proofing Your Business with Company Culture
So why and how should business leaders prioritize company culture to improve their organization’s strength and resilience during economic downturns?
Building a strong company culture to attract and retain top talent
During times of financial hardship, many businesses turn to re-budgeting. This can mean resorting to layoffs, pay cuts, and furloughs. Although these actions may save labor costs, they can also demoralize employees.
Companies that fail to support their staff can experience increased turnover rates and poor productivity as a result of low employee engagement. However, a high-performance company culture that creates a sense of belonging and purpose can enable businesses to retain top talent and maintain a team of dedicated workers.
Employees are more likely to go the extra mile for a business that shows their dedication to providing a positive work environment, especially during tough times.
Cultures built on support and appreciation can encourage productivity
When leaders facilitate a positive work culture, employees are more grateful for their positions, and more motivated to support their organizations. A company culture that promotes a sense of encouragement can motivate employees to go above and beyond.
By recognizing their achievements, leaders can ensure that their employees feel valued for their work. This doesn’t need to be expensive- giving a compliment can provide team members with the motivation and encouragement they need to perform well in their roles.
Positive work cultures promote safety and appreciation, encouraging workers to perform well. Maintaining a job in a stable, safe, and positive work environment can motivate your staff to fulfill their duties and demonstrate their worth as members of your organization.
Strong company cultures can improve your customer base
A solid customer base is essential for your business to gain the revenue necessary to stay afloat in economic downturns. Fortunately, a positive company culture can attract more buyers – and bring in more profits.
Businesses that support a positive work environment can enhance customer outreach and satisfaction. Customers generally aim to support companies that have positive missions and are supportive of their employees. In recessions, your organization can differentiate itself from other businesses in its outspoken support of its staff, which can attract more customers.
Furthermore, customers can often sense when employees are demotivated or disengaged, as these can impact the quality of the company’s products and services. In contrast, employees who feel valued and motivated are more likely to provide better customer service, customer satisfaction, better customer experiences, and a loyal customer base.
Investing in team members can improve company culture, and financial stability
Economic recessions can cause businesses to focus on survival tactics, often leading to budget cuts. But the initiatives that support company culture should not be slashed for the sake of economic safety. On the contrary, while cutting culture and diversity initiatives may save short-term money, doing so can have long-term consequences.
Inclusive programs that promote company culture can help your company survive an economic downturn because investing in your team leads to financial stability.
Rather than cutting staff initiatives, communicate openly with your team about potential budget cuts to ensure they have the structures in place for a strong company culture. Maintaining transparency with your employees will help them feel supported and respected as workforce members.
Company culture promotes unity in times of financial uncertainty
Finally, a strong company culture can encourage your staff to come together as a united front against the obstacles that come with an economic recession.
In economic recessions, maintaining a healthy, inclusive work environment full of resources and support is more important than ever. Rather than reallocating funds or attention away from staff, now is the time when teams need to focus on supporting one another and working together.
By focusing on the people within your organization and strengthening the connections and culture among the workforce members, your business can survive an economic downturn and thrive on the other side!
By creating positive change in your company culture and strengthening your workplace unity, your business can thrive and maintain resilience throughout times of uncertainty.
To learn more about the positive impact of a strong company culture throughout an economic recession, tune in to this week’s episode of the Survive and Thrive Podcast.