How to survive a recession

Redundancies are a difficult but sometimes necessary part of restructuring an organisation, especially in a financial downturn. They are also extremely stressful for those going through it, whether employees are experiencing it themselves or witnessing it happen to their colleagues. 

More than a third of managers and senior leaders said their biggest concern if they had to make redundancies would be losing good employees, while 28% said employee morale and productivity would suffer. A fifth said they would lose hard-to-replace skills or experience.  

The report also found that almost three quarters of managers said their employees had expressed concerns about the impact of a financial downturn on their jobs – 57% said their teams were mainly worried about redundancies, compared to 12% who said the same about salaries being frozen.

Charities are used to carrying out their missions with limited resources, but financial crises can exacerbate matters, preventing organisations from being able to recruit the skills they need and reward their existing employees.  

Almost nine in ten managers and senior leaders said their organisation had or would be negatively affected by a recession. Of these, more than half (57%) said the biggest effect was that recruitment would have to be cut back or halted altogether. Around a third also said they would be likely to freeze staff salaries.

Of the managers and senior leaders whose organisations would be negatively affected by the worsening economy, 35% said that all departments would be impacted by cost-cutting measures, including sales, customer-facing roles, and IT.

How can charities solve those challenges? 
 

The barest rumour of redundancy can be enough for people to start looking for new jobs, even if they aren’t yet being considered by charity leadership. Uncertainty leads to anxiety so it  is more important than ever in a financial downturn to be transparent with employees in order to maintain trust and help them feel informed.  

“Don’t keep employees in the dark: If the company is stable and there is no likelihood of redundancies, address any rumours that might be leading to unnecessary worry,” says the Supporting Your Charity in a Financial Downturn report. “If cuts or redundancies are being planned, reassure your employees that you’ll do everything you can to help and guide them towards new opportunities.” 

Lead with empathy and acknowledge the concerns of your team – Cezanne HR suggests providing employees with an outlet to share their concerns, preferably in a one-on-one setting. This ensures they feel listened to and provides them with a direct opportunity to ask for further support if necessary. 
 

During COVID-19, the ability to deliver services remotely became vital to charities being able to continue their work safely. Investing in the digital technology that supported this meant they could transition seamlessly from an in-office working environment to remote working and continue operating (almost) as usual.

Investing in digital is a vital way of making your charity more agile, efficient, adaptable to changing circumstances, and, crucially, cost-effective. As the Cezanne HR report points out, “Research suggests that the companies that thrived in the last recession didn’t cut back on technology. In fact, they invested more”.

Salary and bonus freezes can be very difficult for teams to navigate, particularly when the financial situation is out of an organisation’s control.