Mental health? Why would we worry about that when the economy looks so grim? Surely, we have bigger things to worry about — like balancing the books?

That sort of attitude presupposes that economic success and good staff mental health are unconnected variables. That is simply wrong. Do you remember the “great resignation”? It was a phenomenon of the pandemic, which saw people leaving unsatisfying jobs and searching for those with greater meaning, facilitated by the staff shortages many countries saw after the pandemic.

However much we’re told it’s a bad thing, many of us get much of our self-esteem from our work, and so making that work meaningful helps boost our sense of self.

Why mental health matters in a downturn

Now comes the flip side of that equation. As businesses stumble and fall during the likely downturn, and the tech winter we’re entering, people’s sense of self-worth will erode, too, because it’s rooted in the meaning of their work. Doing your best to minimise and mitigate that as a senior leader in a company is not just your responsibility as a decent human, it’s damn good business as well.

Why? Which group is more likely to see you through rough economic times:

• A demotivated, scared and fragile workforce, with declining mental health
• An anxious, determined and focused workforce, aware of the challenges, but confident in their role in addressing this
  

Clearly, it’s the latter. Here’s four steps you can start taking now to put yourself in a strong position to weather the storms ahead.

Seek Transparency

We know from previous recessions that customers start rapidly reevaluating their spending, pushing things that were once “treats” or “essentials” into the “expendable” category. Purpose-based businesses can help change that equation in your favour. If, for example, you are a brand with sustainability at your core, you can’t abandon that just because times are tough. You undermine the core relationship you’ve built with your consumers.

But you also fracture your relationship with your staff, many of whom, particularly in the younger generational cohorts, are actively seeking purpose in their work. Seeing that purpose erode will not be good for their sense of self, their sense of worth. And if your business loses that sense of trust, you’ll lose the staff, too, as soon as business picks up. And that’s when you can least afford to leave them.

Previous recessions have shown that any inequalities between senior leadership and the rest of the staff become an issue during hard economic times. You’ll make that worse if you aren’t clear with the staff about the decisions you’re making.

So don’t hide what you’re doing. Be transparent about the changes you’re making, and allow the staff to find their role in it, with enthusiasm and purpose. If you do that, they’ll be better placed to calm, reassure — and even enthuse — your customers about the direction you’ve chosen.

Maintain Connection

As we touched on in another piece, economic downturns can be periods of increasing social isolation. Socialising budgets become part of people’s expendable expenses, and trips out with friends become less common. We’re social creatures and need connections with wide circles of friends to keep healthy.

The days of office trips and socialising in the traditional sense may be curtailed for a while, as budgets need to be closely monitored. All the more reason to invest in some practical, productive and positive team-building. In these days of hybrid work, getting the team together can be a triple win:

1. It allows you to collectively build a strategy
2. It brings the team together in the office to build connections
3. It allows the team to socialise before, during and after the session
   

Before Christmas, I delivered two separate workshops for corporate clients. In both cases, the staff were going on to their Christmas party straight afterwards.

By bundling together business critical meetings and social bonding, you do everyone a favour.

Stay Big

It’s very tempting to retreat in a downturn: focus on the core business, on the things you know well. But some businesses have thrived during recessions by using the opportunity to experiment with big, fundamental strategy shifts that change their relationship with customers.

Adobe, for example, used the 2008 financial crash to experiment with shifting away from its “boxed software” approach to a subscription model. Adobe Creative Cloud became the core of its business, with recurring subscription revenue, rather than one-off purchases.

The company also took advantage of depressed prices to make acquisitions — like that of Omniture — moving it deeper into the digital marketing space.

The past decades of digital transformation have taught us that not everyone is comfortable with change. That said, a company transforming to survive is much more attractive, and feels a more reassuring place to work, than one merely cutting its way to survival.

Cut Smart

That said, strategic cuts are often necessary. So, where should the metaphorical axe fall?

Well, every company has zombie projects. They typically start as innovation exercises, but ones that are poorly conceived. They don’t have strong KPIs assigned against them, so nobody is really looking to see if it’s a success — or a failure.

If you need to cut costs to get through a tough time, this is where you should start. If people can see that the places that are most at risk are those that make little or no contribution to the company’s success, you avoid a culture of fear gripping the company. People who never know where the axe could fall become uncertain, and loyalty erodes.

That is not the workforce you want in tough times. Better to cut early in the areas that aren’t pushing you forwards. That cleaning house opens the scope for more experimentation — and maybe the innovative service or product that will see you through the dark times.

Employee mental health: the path to survive and thrive

The survival equation is very different for people-based businesses. When your people are your core resource, more so than manufacturing facilities or other physical inventory, then you need to work to protect them, even in tough times.

Decades ago, companies might have been able to slash staff without thought to the human consequences of that. But times are changing both socially and legally — as Elon Musk, for example, is discovering.

Gen Z, in particular, is building on the pioneering work of the Millennials in making mental health a business issue. A company that wants to survive and thrive during a downturn needs to take their mental and emotional wellbeing as seriously as it does their physical health.

Photo by Alecia Van Aarde on Unsplash