In the current economic climate many employees are worried about their income and job security which can fuel workplace anxiety that leads to wellbeing and productivity issues. Sarah Bills writes that during uncertain times strong, yet empathetic, leadership is needed along with transparent communication to maintain employee trust.
Economic conditions remain challenging for leaders across industry sectors right now with the cost-of-living crunch, business restructuring and, in some cases, redundancies combining to create a perfect storm of employee unease.
Stats NZ has also released its latest unemployment data, now sitting at 4.6%, the highest it’s been in three years with AUT research also suggesting the reality could be higher at 4.8%.
The impact of these figures has been widely felt across several industry sectors and the public sector is also continuing to make organisational changes to reduce operating costs which has resulted in thousands of job cuts.
Perhaps it’s not surprising that this current storm of economic unrest has seen risk-averse Kiwis hunkering down and opting for income and job certainty.
Our 2024 Randstad Employer Brand Research also found an increasing expectation on Kiwi employers to support their employees through the current cost-of-living crisis. While 40% of workers stated their salary increase partially covered cost increases, 37% also stated they had received no cost-of-living support at all.
Right now, for many businesses, the focus is on remaining viable and, where possible, profitable to ensure business continuity. So while many employers may want to provide additional cost of living support this has to be balanced with the economic reality of ‘keeping the lights on’ to keep their people employed.
In many sectors, employees are worried about their income and job security which can fuel workplace anxiety that leads to wellbeing and productivity issues.
To maintain business continuity during uncertain times strong, yet empathetic, leadership is needed along with transparent communication to maintain employee trust and business resilience.
Organisations that can do this well, will be in a much stronger position to retain their people and manage through the current downturn.
“If an organisation goes the extra mile to take care of its people, its brand is remembered for the right reasons…”
As we have seen time and again, especially during the pandemic, when business leaders needed to make difficult decisions, if an organisation goes the extra mile to take care of its people, its brand is remembered for the right reasons.
Our national carrier is a great example of this in action. In 2024, Air New Zealand was named New Zealand’s most attractive workplace in our employer branding research, for the second consecutive year. It’s now won this accolade eight times in total. An iconic Kiwi brand that has remained resilient during extremely challenging times.
During the pandemic, it was forced to make difficult decisions that impacted its people when its entire fleet was grounded. However, Air New Zealand’s ongoing attractiveness as an employer brand, suggests that it supported its workforce and managed through this period of change successfully without impacting its overall employer brand reputation.
Key steps
While there is no easy way to prepare your own people for difficult news, maintaining your employer brand integrity through this period of change can be supported by a few key steps.
Communication transparency: Implementing a transparent communication plan, including a timeline to support any changes, ensures that managers and employees are informed promptly, reducing water cooler speculation and anxiety. It’s important to also outline potential alternative opportunities or new roles if these are available, including any upskilling or training that may be required.
Manager support: Organisations may also need to consider additional training and support for managers. They will then be better equipped to support their teams, as they are often the first port of call for concerned employees during times of disruption and uncertainty.
Inviting feedback: Providing employees with a platform to express their views or give feedback reinforces that they matter. Leaders can also leverage this communications platform to assure staff that they are present, are listening and can provide answers to any questions.
Employee wellbeing checks: Employers should also not overlook the importance of investing in their employees’ emotional wellbeing. Emotional support is essential for all employees and managers, not just those directly affected by redundancy and job loss. It’s important to address potential issues like ‘redundancy survivor syndrome’ upfront and in a timely manner. Wellbeing check-ins are a great start. Setting aside time for a personal conversation with individuals is a positive step that an employer or manager can take to see how their employees are doing.
Talent retention strategies: It’s easy to think of reducing staff during economic downturns. However, that can also lead to long-term struggles and lost revenues. Losing key employees or critical skills can derail recovery attempts and you might find that rehiring individuals to replace those you lost may be more costly in the long run.
Skills training and development: Providing support for skills development is key to employer brand attractiveness and employee goodwill. Continue to offer reskilling or upskilling opportunities to staff through periods of change. This not only enables greater workforce flexibility, it also supports workers to gain new skills and opens up new employment opportunities if needed.
“Consider other support – employees directly impacted by a restructure may need including guidance on career transition…”
Career transition support: Consider other support – employees directly impacted by a restructure may need including guidance on career transition. For some a redundancy could be an opportunity to explore an entirely new career pathway but they may be unsure where to start. Consider how the organisation can help them with this. For example, this could include providing access to a career coach for mentoring support.
Managing with empathy while ensuring business continuity
In today’s uncertain market, those businesses that are taking a more empathetic approach to leadership as they manage through difficult economic times will be the ones that succeed when economic conditions improve and the labour market inevitably tightens. However, striking the right balance between managing people with commercial priorities will also look different for every business.
What has been clear through these challenging times is that creating an open and transparent environment that prioritises communication and employee wellbeing is key. Organisations that do this well will be in a much stronger position to retain their talent and successfully manage through the current economic downturn so they can come back even stronger when the market rebounds.
Sarah Bills
Sarah Bills is the general manager at Randstad New Zealand. With over 20 years of experience in recruitment and HR services, she is passionate about people, technology and building resilient, diverse workforces.
