31 Aug 2022

Supporting employees through a recession – finding the best way forward

During the economic crisis faced by the UK in 2008, GDP fell by 7.2% and the downturn lasted for five quarters. After an incredibly turbulent two-and-a-half years, there are concerns that we could once again head into a recession in 2022.

Despite surprise GDP growth in May, there is speculation that this could contract in June and beyond because of inflation rates rising, worsening the cost-of-living crisis and squeezing the pockets of households and businesses alike.

A recession is a worrisome time for all. It’s crucial that employers provide the necessary duty of care to their teams, considering how to alleviate outside pressures for employees as much as possible. After all, staff are a company’s greatest asset and should be treated as such.

Mental health comes first
Financial stress will affect every employee differently so, it’s important that employers take time to listen to, and understand, each person’s needs.

The ideal approach is to provide a variety of easily accessible resources and support that can be utilised by staff in a way which suits them best. There are several measures that employers can implement to promote good mental health and support those who may be experiencing poor mental health, including:

  • Providing access to occupational health and counselling services – at Monahans we provide an EAP counselling line, as well as offering up to six full counselling sessions for free.
  • Signposting to sources of external information and support, outside of the company.
  • Implementing Wellness Action Plans – these are approached on an individual basis if concerns about an employee have been raised. The aim is to find out how that person is feeling, what might be triggering negative feelings and putting an action plan in place to help them to manage them. For example, if someone experiences stress in the mornings due to tight timings, it may be worth considering whether their hours can be adjusted to better accommodate them.
  • Encouraging a culture of open and non-judgemental discussions around mental health – feeling safe to have open and honest discussions is the foundation of good mental health at work. Employees must feel comfortable about approaching their line manager or HR team and be reassured that these discussions remain confidential, without impacting their role within the business.
  • Train teams on spotting the signs of declining mental health – not all members of staff will feel able to open up, no matter how accepting the working environment. It’s crucial that staff members, especially those in senior roles, are trained to spot the warning signs of poor mental health and understand how to implement support measures.

What about financial assistance?
If employees are facing financial upheaval, supporting their mental wellbeing is crucial but so is tackling the source of the problem where possible.

Whilst issuing pay rises would be an obvious solution, this simply isn’t viable for many companies, so it is worth considering alternative provisions of support, such as:

  • Allowing working from home days so that employees can save on fuel or travel costs.
  • Allowing flexible working patterns to accommodate for lift shares, again to save on fuel costs.
  • Allowing approved time-off if employees need to speak with an advisor (benefits, financial, emotional support). Even if this is unpaid, it may help.
  • Providing an EAP (Employee Assistance Programme) helpline where employers can speak to counsellors as well as financial and legal advisers.
  • Considering paying all staff a one-off payment to give some immediate help with the increased cost of living. The company would need to consider the fairest way of doing so, for example a one-off set payment for everyone, rather than a percentage of salary.

Whatever initiatives or policies are put in place, it is important to be very clear about what the company is offering, whether it is a temporary arrangement and whether an employee’s pay will be impacted. We would always recommend that any new policy is put in writing via an HR professional.

Avoiding redundancy wherever possible
Whilst there are numerous ways that employers can help their workforce, unfortunately there may be circumstances in which companies are forced to consider redundancies. This should however be an absolute last resort and there is a legal obligation for companies to consider ‘reasonable alternatives’ to redundancies before making any final decisions.

There first must be in-depth discussions regarding other financial efficiencies, cost savings, impending work and whether the downturn in work is temporary or long term. Before redundancy is even considered, there are some alternative courses of action including:

  • Reducing hours of overtime
  • Restricting recruitment, including putting hiring on hold
  • Ceasing the use of agency staff or contract workers
  • A temporary reduction in pay rate for staff
  • A reduction in working hours for staff
  • Redeployment into other sections within the business that will remain stable
  • Job sharing
  • Inviting volunteers

Employers shouldn’t feel daunted about the prospect of exploring options for supporting their staff. Providing mental health support and financial assistance will certainly help ease minds but cultivating an open atmosphere and maintaining a strong lines of communication with your workforce will ultimately be key to ensuring that they feel comfortable in approaching you for support when they need it most.

If you would like to discuss how you can best support your team during this difficult financial period, please contact our friendly team who will be more than happy to help.

Juliet Mellues