Economic downturns bring new challenges for business leaders across the organization. As the steward of talent, culture and workforce strategy, CHROs play a pivotal role in helping companies stabilize operations, engage employees and position themselves to thrive when more prosperous conditions return.
This period calls for deliberative, compassionate leadership along with judicious cost management. By following several key principles grounded in organizational psychology and management science research, CHROs can mitigate the human impact of uncertainty while ensuring their companies emerge stronger.
Provide Transparency and Context
Trust and productivity deteriorate exponentially without insight into organizational performance and direction. During turbulence, communication becomes even more pivotal.
CHROs must provide managers ample information and guidance to have informative discussions with their teams. This includes contextualizing external factors driving challenges so employees understand it is not an individual performance issue.
Regular workforce-wide updates also give people a window into strategy and reassure them of leadership’s capability during unstable times. Even if details are uncertain, transparency into issues considered and processes underway quells anxiety.
Embrace Inclusion in Decision-Making
Gathering input across the organization accelerates learning and surfaces creative solutions. But perhaps more importantly, people support what they help build.
Before major cuts or restructures, solicit perspectives from groups representing different levels, functions and demographic groups. Consider town halls, roundtables, anonymous surveys and delegation of choices to teams.
While this takes longer, the collective wisdom in the room always trumps that of a few executives. And everyone feels greater ownership for hard decisions, reducing polarization.
Provide Support to Managers and Employees
Leaders should recognize that this environment taxes mental health. People may feel profound anxiety, grief or humiliation from job losses and uncertainty.
Equip managers to have frequent supportive check-ins focused on morale. Expand access to counseling and wellness resources. Consider sabbaticals, job sharing and flex time to provide hard-hit groups reprieve.
Sometimes just hearing “This is not your fault; you have value” matters enormously. Small kindnesses also remind people of their shared humanity during periods where conditions seem dehumanizing.
Take Care of High Potentials
Unfortunately, economic strife often disproportionately impacts high potentials from underrepresented groups who lack internal networks to insulate them.
Analyze any reductions with a lens towards diversity. Mitigate layoffs by reducing hours across broader groups. Provide high potential targeted guidance on navigating politics.
Most importantly, double down on inclusion and advancement programs for hard-hit groups during recovery so comparative progress made is not lost. Crises should not change commitment to balancing leadership demographics.
Though enormously trying for both organizations and individuals, periods of economic hardship inevitably arise. How companies navigate the human impact of uncertainty shapes the cultural psyche for years beyond. By leading with compassion, inclusion and vision, CHROs can significantly influence whether their organizations grow stronger or regress from volatility. With deliberative action and support for their people, they help ensure the latter.
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