Since 2023 has begun, there has been talk of a recession. Bank of America is projecting that the United States economy will lose over 500,000 jobs and the unemployment rate is expected to reach 5.5%.  

While laying off employees may be necessary for some companies, it is a time that many companies can double down on their employee retention efforts. Retaining experienced employees will allow companies to continue growing their company and taking care of their customers.

How a recession is impacting employees  

It is important for employers to understand how a recession is impacting their workers. Many employees struggle with stress and anxiety about the possibility of being laid off. During economic downturn, it is important for employers to be transparent with their employees.  

If employers have an idea of the employees that are likely to be laid off, it is best to communicate with them as soon as possible so that they can plan ahead. In addition, if there are employees that you know you will try to keep throughout a recession, let them know.  

While many employees may start looking for new job opportunities due to uncertainty, there are many other reasons employees choose to work elsewhere.  

Here are some reasons why employees may quit during a recession and work for another company:  

  • Flexible work schedules 
  • Higher paying job 
  • Job security 
  • Better benefits 
  • Opportunity for advancement 

Communication is key during a time of uncertainty. Make time to talk to your employees and discuss what the future looks like.  

Strategies to Retain Employees 

Recessions may cause high rates of employee turnover, which negatively impacts employers in many ways. Losing employees increases costs and talent shortages. 

Retaining employees is important during a recession because it allows companies to continue advancing rather than investing their time and money into hiring new workers.  

Here are some ways to retain employees during economic uncertainty:  

  • Review compensation packages 
  • Provide career growth opportunities 
  • Promote work-life balance 
  • Prioritize recognition  
  • Practice empathy 
  • Enhance communication 
  • Offer job security  

Economic uncertainty can cause great stress in the workplace. While some companies may need to lay off employees, it is necessary to also retain skilled and experienced employees. Retaining employees allows for continual growth and development, which is essential during a recession.