Ensuring high employee morale when everything seems down

Why employee engagement matters ahead of a recession and how to manage it.
three employees working together to pull arrow up, how to manage team in downtown

We’re all seeing the headlines and we can’t get them out of our heads – mass layoffs at some of the biggest brands including ones who have only seen growth before. The rumblings of a recession has almost 80% of employees worried their jobs will be cut. To get through this downturn, research shows employee engagement is critical. Here’s how organizations can ensure employee morale remains high when everything seems down. 


Let’s start with why morale matters in a downturn

Employees and companies have been hit with one blow after another since the pandemic started, and a downturn is the latest challenge to the workforce. With so much going on, it could be easy to ignore morale, but employee morale could be the difference between surviving and suffering in a downturn. Employee morale (how you feel about the company) is directly connected to employee engagement (how much effort an employee puts into their job). Companies with employee high engagement will be more productive in all economies. Unfortunately, only about one in three US employees are engaged. Yikes.  


To reconnect with employees, managers will have to step up. Managers are the key to morale and can foster strong ties to the company. They can set clear expectations, provide support and resources, show genuine appreciation, consistent recognition, and support a culture of learning and growth. All core factors for high engagement, leading to more productivity and more profitability even when times are tough. 


Managers don’t have to blow the budget to boost morale. There are actually simple and cost-effective ways to improve morale and engagement. 


  • Say thank you. Show employees you appreciate them by giving thanks. A thank you for completing a project or a thank you taking on extra responsibilities as the company adjusts during tumultuous times.
  • Celebrate employee milestones, like work anniversaries or birthdays. Have colleagues and management sign a digital card with meaningful messages. This can be a perfect opportunity to recognize an employee’s contributions which can help keep them happy and hard working. 
  • Share success. Give employees and colleagues a shout out to recognize a job well done – no matter how big or small and be specific, explain how it helped contribute to the organization’s mission. Also, company accomplishments should be recognized too. 
  • Host virtual team building events to build stronger relationships with colleagues. This can be games over zoom or coffee breaks to bring some fun distractions during anxious times. 

How to engage with your employees in a downturn

Be clear. Be transparent. This will build trust – the foundation to any strong relationship and a top factor for employee happiness. Organizations should have avenues in place to share news, especially bad news, so leadership can get ahead of rumors. A rumor can turn into rumination and resentment, as employees speculate on what ‘this’ could mean for them, letting their imaginations run wild. Compare that to employees learning about an update or change to the company directly from management and being able to make an appropriate action plan. Now is not the time to lose good talent over upcoming changes that were leaked without context or misconstrued. 


First companies should determine what information can and should be shared with employees and then decide how and when. Organizations can go for a bottom-up approach and go straight to employees to find out what they want to know. 


  • Have avenues to listen to your employee base – whether that’s a quick poll, survey, or virtual Q&A event – so managers can get a pulse on how people are feeling. Submissions can be anonymous, so employees can feel comfortable adding questions or concerns. 
  • Let employees control the agenda for the next all-hands. Collaborating on the agenda as a team creates an equitable experience, allowing everyone to have their most pressing issues addressed by management during the meeting. 
  • The three Ts – transparency, trust, and teamwork. Let the team know about an issue facing the company and let them help brainstorm solutions. Employees have a different perspective than leadership and can come up with new, creative ideas that weren’t being considered. 
  • Determine where critical company updates will be posted and can be found for later reference. An employee’s digital hub, company email, dedicated Slack channel, etc. Whichever you choose, make sure employees know so they don’t miss any vital messages. 


Being transparent doesn’t just mean sharing challenges. Companies should share successes too. Both are good for morale and the bottom line.


The rumblings of a recession could soon turn into a full-blown economic shakeup. Organizations that prepare themselves and their teams will be better equipped to manage through and out of a downturn. 

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