By all accounts, the United States is likely heading into a recession. Already, the country experienced two consecutive quarters of declining gross domestic product (GDP), which is a red flag.
Other signs include inflation, the cooling down of venture capitalist’s investment, a declining stock market, and varying interest rates. However, a strong job market persists, which throws off the usual domino effect, according to CNBC. Still, how people feel about their financial prospects matters, too.
Most Human Resources leaders are preparing for the worst. A recession is marked by an extended downturn in the economy, layoffs, unemployment, and lower consumer spending. For HR, recessions are magnified because they usually face the downsizing of their own department and the need to layoff talent, make due with less, and face the obvious consequences, which include having to constrict budget and lose talent pipelines for succession.
Therefore, Human Resources is usually keen on recession-proofing their business, and many have begun to do just that. Here are some ways to prepare for the coming storm:
Stick to the Budget
The pandemic made employees rethink their lives and shift their priorities. As a result, many were willing to leave the workforce unless employers transformed how they worked. The consequence was the Great Resignation. Whether one likes or hates that title, there is no question that the phenomenon of people quitting and a resulting labor shortage, which is also dependent on changing demographics, are real.
HR responded with signing bonuses and hefty pay raises. They plussed perks and benefits. With an oncoming recession, however, some of these tools for attracting talent must be curtailed or flat out stopped. Those with the future in mind are cutting back and avoiding risk when developing budgets.
Prioritize Employee Engagement and Experience
Smart Human Resources leaders recognize that the pandemic earned them their seat among C-suite executives. Business leaders are well aware that the talent churning out the work is vital to their success.
In many ways, employee engagement and experience is even more important in a recession. If there are layoffs, the people who remain become paramount. At the same time, they are likely overworked and stressed by the economy, not to mention the prospects of their organization. HR should step in and show gratitude and do what it can to keep up morale. Writing thank you cards and lending an ear are affordable ways to connect with workers.
Transparency is of the utmost importance during a recession. Obviously, organizations keep their plans for layoffs under wraps until the last minute. However, they should be able to offer honesty to the employees who remain.
Obviously, they are going to be concerned for their own future, what these layoffs mean for the future of the company, and how their work life will change from this point on. Will they be doing more work to fill in for those who had been let go? Are there going to be freezes on annual raises? How grave is the situation?
Human Resources is the conduit for communication with workers. HR leaders can communicate forthrightly and encourage executives to do the same. They can set up town halls, similar to the ones they planned during the pandemic, with business leaders in their organization. This kind of approach is crisis management 101.
Be Prepared for Layoffs
Layoffs are already happening at a number of companies, including Peloton, Netflix, and Ford. Google announced a hiring freeze. So, realistic HR leaders will prepare themselves for the possibility of stalemate at best and layoffs at worst. Also, they will avoid layoff mistakes, like informing people they are being let go in a cruel way like, for example, over a group Zoom meeting. While no one wants a recession to happen, smart HR leaders are getting ready for the worst case scenarios.
By Francesca Di Meglio
Originally posted on HR Exchange Network
Many young employees from Gen Z are taking to TikTok to express their frustration about the workplace and profess their practice of quiet quitting. Essentially, they are remaining at their jobs and still receiving paychecks and benefits, but they are sticking strictly to their the job descriptions and maintaining precise schedules.
On social media, some are bragging about doing the bare minimum because of their disappointment in their employer or simply as a lifestyle choice. Some older workers are suggesting this is a result of laziness or lack of ambition. Many in Gen Z argue that they are simply doing what is expected of them contractually, and nothing more, to maintain work-life balance.
The Phenomenon of Quiet Quitting
More than 3.9 million TikTok posts (and presumably counting) have addressed this phenomenon. Many explain that quiet quitting is really about setting boundaries and improving work-life balance or fighting the proverbial man.
“You’re not quiet quitting,” says Claudia Alick in a TikTok video. “You’re just resisting being stolen from. Unfortunately, that’s how capitalism works. That’s how they make a profit. The profit comes from you not getting paid your full value.”
But some career experts and even other TikTok users suggest that young employees are playing with fire. By never going above and beyond, they are making themselves vulnerable to layoffs at a time when budget is a concern. In addition, they might rule themselves out of promotions down the road.
Emily Smith, a TikTok user, reminds people that their boss might not know all their tasks or how long it takes for them to get everything done. She suggests having a conversation about what to prioritize and how to spread out the deadlines is a better route than quiet quitting. Others suggest this practice is bad news for employers.
“Experts say any lack of motivation among a company’s youngest workers can become a troubling sign. ‘Organizations are dependent on employees doing more than a minimum,'” says Mark Royal, senior director for Korn Ferry Advisory, according to a Korn Ferry blog.
What Should HR Do?
HR leaders should investigate the phenomenon of quiet quitting to determine whether it is happening at their organization. After all, a lack of employee engagement is top of mind in Human Resources. Thirty percent of those who responded to the latest State of HR report said employee engagement and experience is their top priority.
The pandemic forced people to rethink their lifestyle and reprioritize work. For many, family, friends, and personal pursuits have replaced work in the top spot. Some say that quiet quitting is the new checking out. Regardless, the Great Resignation has shown that employers, who do not take these shifts in culture seriously, will pay in a loss of talent.
At the same time, the top consequence of the pandemic, according to the respondents of State of HR, was burnout. That may be why TikTok users are leading the charge to demand better working conditions. Certainly, HR leaders are responding with different benefits, such as unlimited PTO and zen rooms, and policies like devising rules that limit calls and emails outside of work hours.
Even Goldman Sachs, famous for its 100-hour work weeks for associates, is requiring employees to take paid time off. Salesforce is testing work weeks with no meetings. Others are experimenting with four-day work weeks, flexibility in when and where employees work, and company-wide vacation days. This experimentation is part of the transformation of work that everyone is witnessing post pandemic.
The question becomes whether quiet quitting is an afront to employers that will degrade their ability to serve customers and innovate or is simply a new way of working that puts people’s personal lives and wellbeing above everything else. Perhaps, this is just part of the cultural shift and workplace transformation the country has been experiencing since the start of the pandemic.
By Francesca Di Meglio
Originally posted on HR Exchange Network
“Financial Wellness” is getting a lot of buzz these days — and for good reason! After all, today’s workforce is overwhelmed by mounting student debt and other rising expenses.
Financial wellness refers to a person’s overall financial health and is one of many factors that makes up employee wellbeing. We often think of wellbeing as related to physical and mental health, but financial stress impacts a person’s health as well. When employees are stressed about their financial situation it effects their productivity, attendance and engagement in the workplace.
Organizations are continually looking for ways to stay competitive and have an advantage in attracting and retaining qualified employees. With the current economic conditions, people are looking for jobs that offer more than just paid time off and health insurance. Therefore, many businesses have turned their focus to employee financial wellness programs to add value to their compensation packages. More than 51% of organizations offer financial wellness initiatives and 29% of companies are interested in launching financial wellness programs. Offered as a voluntary benefit, financial wellness programs send employees a valuable message, letting them know their company cares about them and is ready to extend a helping hand to those in need.
The goal of implementing a financial wellness program is to support and improve the financial health of employees by providing tools and resources to help them manage their current finances, protect against unforeseen financial hardships, and plan for a financially secure future.
Let’s take a look at some of the financial wellness solutions available:
- Educational Programs – An education-focused program that equips employees with the information they need to plan for emergencies using current employer benefits. Financial guidance sessions and financial education workshops are available via live chat that teach employees about budgeting, credit scores, retirement savings and savings accounts.
- Employer Matching Programs – A matching program involves an employer matching a certain percentage of contributions that employees make to their 401k, student loan repayment or a 529 (college savings) fund.
- Financial Assistance Programs – These programs focus on alternative stressors employees might not have considered as a factor in their financial health. These include medical bill zero-interest financing, medical bill negotiation, relocation assistance and stock options.
- Insurance Options – Employers can consider including alternative insurance programs such as long-term care insurance, pet insurance, adoption and fertility insurance, accident insurance, critical illness insurance, and life and disability insurance.
Over the past year, employee financial distress has intensified, which means it’s the perfect opportunity to bring financial education into your workplace. It won’t be easy. Reducing financial stress and improving financial health for your employees takes a comprehensive plan, but it will be worth the investment. Your commitment to prioritizing financial health will help improve the lives of your employees. Financially healthy employees are healthier and happier; they are better for the company’s bottom line.
The Great Resignation has paved the way for resignation remorse, according to a number of publications. In fact, 72% of the 2,500 U.S. workers surveyed by The Muse said their new role or company was very different from what they had been led to believe. For HR leaders still dealing with a labor shortage or simply trying to fill open positions, this news could help.
Ideally, HR professionals are tracking employees and can address issues before the valued employee decides to quit. Predictive analytics can prove beneficial in these cases. However, sometimes, there’s nothing HR can do, until and unless ex-employees realize they made a mistake.
Learn about how HR can capitalize on resignation remorse:
Court Departing Talent
Some employees are not a good fit, and it might even be a relief when they give notice. However, there are many employees that HR professionals and hiring managers wish would stay. Always make a person’s exit a positive experience.
To start, express disappointment when a valuable employee quits. If possible, see if there is any way to get him or her to stay. Conduct an exit interview to pinpoint the reasons the employee decided to quit. Sometimes, the answer will be as simple as receiving a higher salary. Often, there’s not much HR can do about that kind of resignation.
However, there are other reasons people leave jobs. Maybe they need more flexibility because they are parents. Perhaps, they want to a job that gives them more of a sense of purpose. HR professionals have an opportunity to share ways they could have accommodated those needs.
Even if the employees are still going to move on, they will know of the possibilities should they ever want to return. Of course, let them know they could always come back to interview again should there be openings that might be a good fit.
Create an Alumni Network
Speakers at the recent Employee Engagement and Experience event talked about the employer brand. One of the ideas that many companies have had is staying engaged with employees who leave the company. Previously, the idea was simply for the employee not to burn a bridge.
However, now some employers are reaching out and staying connected to former employees, who have had positive experiences. They ask them to spread the word about their time with the organization and recommend job candidates. HR leaders can stay connected on social media to promote the company and follow the achievements of their former employees. Sometimes, these groups of alumni form organically online. It’s just a matter of discovering them.
Stay in Touch
At top business schools, people always talk about proper ways to network. One of the biggest bits of advice is to connect with people regularly for the sole purpose of checking in. In other words, one should not reach out simply for transactional purposes.
HR professionals can come up with a schedule for dropping a note to stellar, former employees who could be an ambassador. Of course, they should follow them on social media, and they can celebrate new achievements. The point is to develop a relationship, so this ex-employee can either promote the employer brand or return to the company at some point.
Actively Recruit Alumni
Not every former employee is going to be a good fit for a comeback. Some will, however. They come back to the company with certain benefits to the employer. They know the basics of how the place works. Even if things must have changed while they were gone, they still have some contacts and basic institutional knowledge. They will not require as much training. Most importantly, they have likely picked up new skills in their time away.
As a result, HR professionals should use this alumni network to actively recruit for positions. Even if the alumnus is not interested, he may be able to connect you to others, who would be a good fit. The bottom line is that HR professionals should stay connected to former employees as part of a complete and innovative recruiting strategy.
By Francesca Di Meglio
Originally posted on HR Exchange Network
Today’s offices potentially span five full generations ranging from Generation Z to the Silent Generation. A coworker could just as easily be raised with a smart phone in hand as they could have used a typewriter at their first job. Some see differences between generational colleagues as an annoyance (“kids these days!”) and many rely on generational stereotypes as fact. Current research questions the validity of generational stereotypes. This series uncovers top generational myths as a strategy to support a diverse and healthy employee population.
The U.S. population soared following World War II and this surge created the aptly named Baby Boomer generation. This generation was born between 1946 and 1964 and represents the eldest colleagues at work. The top three myths of Baby Boomers include:
- Baby Boomers don’t understand technology.
This stereotype has been overplayed in popular media. (The older colleague scared of Excel who needs to call the helpdesk to send a Slack message.) The truth is that a member of this generation (Tim Berners-Lee, to be exact) invented the internet. And while their zeal for new apps will likely not match your fresh college graduates, they are still more than capable. Between 76% and 81% of Boomers go online regularly. Give them a chance.
- Boomers are traditionalists.
The real question is, how are you defining tradition? Because Baby Boomers were the firsts in a lot of meaningful areas that can hardly be called traditional. Many Baby Boomers were idealists and had no problem taking action to support their social and political visions. This same vigor is seen in the workplace. For example, more Boomer women entered the job force than prior generations, increasing representation in the workplace. Just because this generation doesn’t share some of the same proclivities as younger generations, don’t assume they won’t speak up for what they want or will accept the status quo.
- Boomers are ready to exit the workforce.
With the older members of this generation approaching 80 years old, many assume this group is on its way out the door. The facts tell a different story. A 2018 Pew Research Study showed that close to 30% of Boomers in the 65-to-72-year age range were engaged in looking for a job or working. Baby Boomers aren’t sitting back on their heels (nor can they with the additional income needed to support the longer lives they lead in comparison to their parents’ generation). They want to stay connected with the workforce whether this is staying on staff in a full-time capacity or finding a part-time job where they can explore their hobbies. Boomers make great mentors as well so don’t pass up this opportunity to learn from your elders.
Baby Boomers had, and still have, a heavy pull in corporate America. This is a result of their group’s size, as well as their plans to stick around the office longer than expected. They may be more technology savvy than assumed and can’t be boxed into the traditionalist category. Finally, Baby Boomers are full of institutional knowledge that other generations should soak up.
This is the last article in the multi-generational myths series and can serve as a warning to not judge a book by its cover. While generations are affected by similar political, social, and economic events, they also develop in nuanced ways.
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The United States, like some other countries around the world, including the United Kingdom and China, are facing an inflation crisis in this post-pandemic era. Inflation has great influence on Human Resources because it can cause the need for wage stagnation and budget cuts. The biggest disappointment during times of high inflation is the possibility of layoffs.
First, HR professionals should fully grasp inflation, which is the general rise in the prices of all consumer goods and services. The United States turns to the Consumer Price Index (CPI), which is measured by the U.S. Bureau of Labor Statistics, to gauge inflation, according to the Guardian. In fact, the United States is experiencing a 40-year high in inflation. Prices rose 8.5% year over year in March 2022.
There is no one root cause for inflation. Over the past few years, the world economy experienced a perfect storm that included a once-in-a-century pandemic and necessary stimulus, continuous lockdowns in China that have damaged supply chains, and a war in Europe between Ukraine and Russia that costs money to fight but is also hurting the world’s food and gas supplies.
In the United States, HR leaders are facing these challenges like everyone else. But they have one other issue with which to contend: the Great Resignation. (Some refer to it as the Great Reshuffle.) People are continuing to leave their jobs to seek better employee experiences, benefits, and compensation packages. In fact, 4.4 million people voluntarily quit, and companies doled out a record low 1.2 million layoffs in April 2022, according to CNBC. In addition, employers had 11.4 million job openings.
Some experts are saying it is the tightest job market on record. What seems like good news for the economy can actually mean that the country is headed for recession. If people have well-paying jobs and money to spend, demand goes up and so do prices. When this happens and supply is short, inflation skyrockets. Eventually, wages can not keep up with inflation, and people start cutting back on spending. Then, recession can begin.
Obviously, if the economy enters recession, companies will be tightening their belts. As a result, they may have to cut down on labor costs and do more with less. This often leads to layoffs and other budget cuts.
What’s Happening Now?
While some sectors, such as tourism, are bouncing back after the pandemic, others are slowing down. All those tech companies that earned boosts during the lockdowns saw drops in sales. Technology companies are already experiencing some hiccups in the job market. Uber, Microsoft, Twitter, Wayfair, Snap, and Meta (parent company of Facebook) are either slowing down hiring or putting hiring freezes in place. Netflix, Peloton, and Carvana laid off employees.
Still, these are the exceptions and not the rule. Most companies are still facing a shortage of labor, and unemployment remains historically low. Job candidates and employees have all the leverage despite concerns about a looming recession.
However, there are some signs that the tide may turn. First, the job market has to cool, which means fewer jobs can be available, for inflation to go down. Full employment, when everyone who wants a job has one, will make inflation rise. At some point, especially with gas and groceries costing as much as they do, individuals will not be able to walk away from jobs as easily. In addition, the companies will get leaner and do more with less, so they will stop hiring as much.
Some organizations have pumped up their hiring to meet the post-pandemic consumer demand, and they may then have to lay off their employees in response to a downturn in the economy. At that point, there may be another shift that gives leverage to the employer again. The question remains whether the transformation in treatment of employees, compensation and benefits, and work-life balance initiatives will endure in a recession.
If HR professionals must lay off their employees, they should have a plan and be kind. Those who have laid off people via Zoom or with harsh words have lived to regret it in the age of social media, when people share everything. Unfortunately, layoffs happen. It’s how HR leaders handle them that separates the professionals from the amateurs.
By Francesca Di Meglio
Originally posted on HR Exchange Network