More and more economists say the U.S. is getting closer to a recession: as of about mid-August, most were predicting its start in early 2021, possibly even some time in 2020.
No matter when it comes, a recession is coming: they always do, same as the sun rises in the east and sets in the west. It’s a modern natural economic cycle.
Therefore, because it appears that one will be wending its way to us in a few months, what could it mean about employee retention?
Many people believe retention won’t be a problem. After all, recessions always mean more firing and less hiring, so employees “would be foolish” to leave a company when “every” company appears to be letting people go and not hiring new ones.
And this may be true, especially in the beginning and middle of a recession, when layoffs are rampant and the unemployment rate creeps up.
Recessions Always Come…And They Always Go
When the recovery occurs – and it definitely will – many overworked, tired, and stressed workers may start looking elsewhere: this is exactly what happened in the economic recover after the Great Recession (December 2007-June 2009).
In addition, if you weren’t a manager, hiring manager, CEO, or recruiter during the last recession, you may not have experienced how hard it was to find great employees, even though (as the link above states) companies (during the recession) were “reporting receiving as many as 1500 or more resumes in response to an ad on the national job boards. ….[Yet] we continue to hear the same message ‘where are all the good candidates?’”
What’s more, your top employees – the ones you kept during one or more layoffs – especially may decide to look elsewhere once the worst of the recession is over.
(Note: this also could benefit you, as you could end up hiring dissatisfied employees looking to leave their employer, what this post-Great Recession/2009 article dubbed a “turnover surge.”)
Bottom Line? Looming Recession or Not, Pay Attention to Retention!
Filling needed vacant positions is costly no matter how well the economy is performing. After all, recession or no recession, the current serious talent shortage will remain. Which means if you keep your top employees during a recession but let your second- and third- workers go in a reduction in force, you may wish you’d kept at least your second tier folks. Why? Because it could be quite difficult to find even good “B” players (see “where are all the good candidates?” above).
Helpmates can work with your managers and members of your HR team and create a workforce management plan that keeps productivity humming at your company no matter if the economy expands or contract.
Give a shout out to the Helpmates branch nearest you for more information.
