Between Twitter and LinkedIn, I have a very curated feed that seems to reflect the intersection of technology, futurism, and economic trends. For the latter part of 2021, there was excitement about how we just accelerated the employee experience 20 years in only 3, how web3 was going to democratize the internet, and how we would be living in rich virtual worlds and be fully immersed in all things digital. Now, however, I read about an impending blood bath, tech layoffs, plummeting valuations, burn rates in start-ups, and investment and VC (Variable Compensation) dollars completely drying up. At the risk of sounding parabolic, we have been here before. Usually when we hear within the news cycle that we are approaching a recession, we are already fairly deep into one. For many organizations, this means looking to control costs in an aggressive manner and halt investment until the market recovers and for some, it might mean a very interesting opportunity.
The Harvard Business Review has delved deeply into the patterns of recessions and which businesses emerge from recession ahead of their peers and the findings are very interesting. What often separates the leaders in an industry is how they handle recessions and the careful investments those organizations make during economic uncertainty.
Investments made today in areas such as product development and information or production technology will, in many cases, bear fruit only after the recession is past. Waiting to move forward with such investments may compromise your ability to capitalize on opportunities when the economy rebounds. And the cost of these investments will be lower now, as competition for resources slackens.
Given current financial constraints, you won’t be able to do everything, of course, or even most things. But that shouldn’t keep you from making some big bets. Prioritize the different options, protecting investments likely to have a major impact on the long-term health of the company, delaying ones with less-certain positive outcomes, and ditching those projects that would be nice to have but aren’t crucial to future success.” – HBR, Seize Advantage in a Downturn
In the most competitive talent market that I have seen, employee experience is more crucial now than it has ever been. The companies that continue to build an intentional corporate culture, focus on talent differentiators outside of compensation, and lead with empathy, will emerge ahead of those who don’t prioritize their people and invest in their shared future. Many organizations are choosing to accelerate their investments into engagement and connectivity with their people to ensure they can retain their top performers and prevent exposing themselves to the risk and cost of losing key talent. Some organizations won’t make those investments and are increasing their risk because having a great employee experience is no longer a nice to have, but an expectation that employees generally hold.
Innovation into the future of work will continue and for some organizations, they may decelerate their change curve and adopt a prevention-based approach to mitigating the effects of a recession. However, the companies that have historically emerged as winners from a recession have usually had a progressive focus that balances investment with cost controls. Organziations that adopted a progressive focused approach during a recession outperformed their rivals by at least 10% on top and bottom line growth. The future of work is exciting, and we would love to help. If you want to enrich your employee experience, reach out to us at Engage@linezero.com
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