As a specialist in careers and outplacement, lately I have been asked many times, whether a rise in layoffs is on the horizon, as world affairs, inflation, supply chain issues, energy prices and economic uncertainty push the global economy towards a recession. It’s not a question I can answer, but maybe it’s just a matter of perspective anyway.
With uncertainty about local and global economic outlooks in the year ahead, Goldman Sachs recently upgraded their growth forecast for the economy this year, buoyed by a slightly brighter global economic outlook and end to China’s COVID-zero policy. Their upgrade was in stark contract to Treasurer Jim Chalmers’ sombre tone, believing that the surprise abandonment of its COVID-zero strategy is cause for more worry. The Australian Bureau of Statistics said last week that jobless rate held steady in December as the economy shed 14,640 jobs and the number of unemployed edged higher. Some saw this as a sign that the jobs market may be cooling, yet even with the jobless rate holding steady at 3.5 per cent in December, the result was still a near 48 year low, – a powerful economic buffer. According to JP Morgan’s 2023 Business Leaders Outlook Survey, business leaders across Australia are cautiously optimistic about the economy. More than half have a positive outlook about global (59%) and national (59%) economies. Still, 46% of Australian business leaders said they expect a recession in 2023, although the sentiment about the likelihood of a recession is lower in Australia than other parts of the world such as the US, India, Germany and France. Rising costs in general are weighing on Australian business, their biggest challenges as energy prices, increased cost of capital and supply chain issues. Despite this, there is a high expectation that revenues will increase or remain the same in 2023. So much uncertainty!
Managing through recessions are a part of leadership responsibility. What you say and do matters, especially when you are coming off the back of a dramatic change associated with the pandemic. Covid shifted things around, accelerated automation and this is pushing some low skilled white-collar workers out of jobs. In this post Covid environment, businesses are restructuring themselves, changing the way they operate, getting more efficient and deploying better skilled people. The tech industry has seen several widely publicised layoffs recently as companies rebalance their headcount after growing too rapidly during the pandemic and misjudging the length of that surge in demand.
The last few years have thrown many obstacles and many of us feel burnout in more than one facet of our lives, so it’s imperative to create a culture of psychological safety and positivity. Inflation and a cloudy economic outlook are without doubt taking a toll on the workforce, triggering anxiety and prompting professional employees to consider career changes or seek out higher paying jobs. The fear and anxiety of recession has, triggered concerns or job insecurities, and many are already actively changing their careers or planning to do so. So, we need to get on the front foot, and help people funnel their emotions to a more positive outlook.
Thoughtful and empathetic leadership drives engagement
Talk of recession and inflation inherently impacts our stress levels, health, and wellbeing, however organisations can boost morale during this uncertainty or prepare for recession. It’s important to encourage employees to maintain a healthy work life balance and have solid strategies to help employees remain motivated and determined. Even without a recession, economic downturns overwhelm us and create fear, so then there’s a high chance that employees are not engaged because they are too busy worrying about finances, job security or distracted by looking elsewhere for work. They may feel overwhelmed by daily tasks, disappointed at pay raises and bonuses being put on hold, or uncomfortable to ask for a rise, despite their financial burdens. The cloak and dagger of uncertainty, tests our resilience to handle ordinary daily pressures and demands.
Thoughtful leadership builds the loyalty that retains employees and helps to keep them engaged, productive and often even inspired during difficult times. The empathetic manager encourages autonomy and flexibility, gives employees stretch goals and assignments, training, access to a career coach, and resources to excel, all of which builds self-efficacy. Growth opportunities and team building activities help to build meaningful connections, just as helping individuals to feel valued, appreciated, and developing, fuels their motivation and inspiration as they progress towards their goals.
Cushion the blow with outplacement – a competitive brand strategy
Preparing for inevitable reductions in the workforce is crucial, especially since layoffs can occur during recession or expansion. With inevitable economic shifts, organisations and their managers must brace themselves for change and investing in outplacement should occur before an imminent reduction in the workforce. Outplacement can cushion the blow and provides reassurance and support for the remaining staff, who may be destabilised having witnessed others lose their jobs. They may find themselves looking over their shoulder and asking “am I next?” Helping employees through what is another challenging period, is the right thing to do and reflects well on your organisation when the economy recovers, and you need to re-hire.
A priority to preserve company culture, includes providing outplacement for those who lose their roles, and support for those remaining, often referred to as survivors. These strategies play a key role in repairing any negative effects of job loss and the process of transition far less painful. This can improve competitiveness and provides value to your employees, especially important given that we are still in a very competitive hiring market that requires a good company culture and brand to attract and maintain talent. Delivering a sense of hope makes the present moments and hardship less difficult to bear. Offering outplacement is the socially responsible and right thing to do and it helps provide a positive exit from the business and eases anxiety among survivors. Job loss can be a very destabilising event because it’s the loss of income, the work social network, and the loss of purpose. This is particularly challenging if you have been with an organisation for a long time, and further compounded if a recession limits job opportunities and entire industries are impacted.
Outplacement helps to expedite career transitions, with pragmatic support to help individuals to find a new job, to catch up on the latest career trends and to structure their approach effectively. It can provide a longer-term solution in closing a door and opening another, giving individuals a larger platform to transition to a different role smoothly and to pivot their career or upskill if need be. The coaching helps individuals to develop a plan, vision and focus where they match their skills to market demand and to navigate the job search process in an empowered way. Features include strategic networking, building a quality marketing pitch and resume, a social professional media presence, personal branding, and interview preparation and practice. When you invest in outplacement you show your commitment to departing employees’ well-being and future success. This demonstrates your organisational values and commitment to corporate social responsibility.
So, whether it’s to boost morale or provide development opportunities through career coaching or executive coaching, or to support employees with outplacement, deliberatepractice careers, outplacement and coaching services provide customised transition solutions to ensure your people feel valued and appreciated at all stages of the career lifecycle. To chat about this call our Careers Team on 1300335423 or careers@deliberatepractice.com.au
