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From surviving to thriving during a cost of living crisis

Published by Jenny Winspear & Cassidy Mason,

30 June 2023

With the World Bank having predicted a global recession for 2023, it is no surprise that businesses are considering where cost-efficiencies could be made and for those that see wellbeing as a ‘nice-to-have’, it is often the first to go. However, if history has taught us anything, an economic downturn means that employee wellbeing is more essential to success and survival than ever. Maintaining wellbeing ensures that one of a business’ most important resources, its employees, are as productive as possible, as well as reducing the high cost of turnover.  


Productivity 

One of the primary reasons why employee wellbeing is so crucial during an economic downturn is that it can have a significant impact on productivity. The impact of financial uncertainty often results in a shift in priorities for employees. It has an impact on mental health, stress, resilience, and productivity, and if people are suffering, so does their work output, which impacts the business bottom line. However, providing support for wellbeing has been proven to significantly reduce the adverse impact on productivity.  


"The impact of financial uncertainty often results in a shift in priorities for employees."


Retention 

Furthermore, top-performers (who are going to be in even higher-demand than usual) might not typically consider moving jobs for an extra £5,000. In a cost-of-living crisis however, that sum of money feels much more significant, which is why we see lots of movement in the job market. However, if that top performer feels valued, looked after, supported, and knows their company prioritises wellbeing, they are less likely to be tempted to jump ship for a place that might not have the same supportive culture.  


Reputation 

Companies that have been paying lip-service to wellbeing will quickly become exposed when they are the first to cut their wellbeing initiatives in an economic downturn, undoing a lot of the good work done during the pandemic and impacting recruitment efforts. Millennials and Gen Z’ers, who globally make up nearly 50% of the workforce, are much more health and wellbeing conscious than their predecessors, and are increasingly drawn to organisations that create workplaces that reflect their values. When they see businesses withdraw wellbeing support, it will adversely affect the business reputation and perception of their values. 


Support 

If a business does not have the resources for a wellbeing strategy, often there are other areas that can be utilised, such as L&D. Providing education on mental health management and, perhaps most valuably in a recession, providing education on financial planning for employees, can have hugely positive impacts on mental health and therefore, productivity and retention. 


"Supporting employee wellbeing does not have to be expensive."

There are also many free things that businesses can do to support employee wellbeing, including encouraging breaks, offering flexible working arrangements, promoting physical activity including walking meetings, encouraging social connection, introducing mentoring programmes, prioritising work-life balance, creating a positive work environment, and offering employee recognition programs. Supporting employee wellbeing does not have to be expensive. By implementing some of these simple and free initiatives, businesses can foster a positive and healthy work environment, leading to increased productivity, engagement, and retention. 


In conclusion, employee wellbeing is crucial during an economic downturn. Prioritising employee wellbeing can lead to increased engagement and productivity, decreased costs in the long run, improved employee retention, and a positive company reputation. Therefore, it is important for companies to continue investing in employee wellbeing during difficult economic times, even if it means making cost efficiencies elsewhere. By doing so, businesses can ensure that one of their most important resources, their employees, are as productive as possible, as well as reducing the high cost of turnover. 


Business Brief Article June 23 Edition

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