With a potential recession on the horizon, we know you want resources to help your business master the moment. We've put together our Agility & Excellence Resource Center to bring you strategies and solutions with a finger on the pulse of what's ahead.

An estimated 2 million jobs could be lost nationwide in 2023, according to Citi Global Wealth Investment’s Wealth Outlook Roadmap. This means that unemployment could rise above 5% this year if projections reach these estimates.

The economic downturn may lead to layoffs. However, employees may choose to leave an organization voluntarily during this time in search of better opportunities. So, while employee retention may not be top of mind for employers as they prepare for a recession, it is essential to preserve an organization’s performance, minimizing costs and enhancing employee wellbeing.

Employee Retention Matters Now More Than Ever

Skilled and experienced employees are crucial for maintaining and improving the quality of an organization’s products or services. Losing those employees can negatively impact overall company performance and can be costly in terms of the time and resources employers will have to spend on hiring and training replacements.

Retaining employees can also help to maintain morale and motivation within an organization, especially during times of uncertainty and stress.

Why Employees Leave Amid a Recession

Stress, financial instability and fear of layoffs can significantly impact an employee’s experience in the workplace during a recession. As morale decreases, the advantages of seeking employment elsewhere seem to multiply. Here’s why employees leave during times of economic uncertainty:

• Higher-paying job — In the face of a potential recession and layoffs, there may be a significant amount of job openings, and employees may quit their current jobs to look for higher-paying positions or roles with better benefits.
• Flexible working conditions — Employees may quit their current position if they feel the working conditions do not align with their needs. This often means exploring hybrid or remote working opportunities to achieve a greater work-life balance, which many employees seek during times of extreme stress.
• Job security — Financial stress can create job uncertainty for employees. Particularly if employees are worried their organization may be conducting layoffs or downsizing, they may seek a new position offering more substantial career stability, which is often desired more than higher wages during economic hardship.

Considering the possibility of a potential recession and increased turnover, employers should prepare to face talent shortages, increased costs and negative shifts in company culture. However, there are strategies your organization can employ now to enhance retention down the line.

Key Employee Retention Strategies

• Provide career growth opportunities. When employers invest in their employees’ professional growth, they’re more likely to grow their careers at their current workplaces.
  
• Review current compensation packages. A compensation package includes salaries and employee benefits. Oftentimes, cost-effective enhancements can be made to employee benefits to boost retention efforts while preserving your organization’s bottom line.

Learn more about cost-saving strategies to stretch your benefit dollars in our interactive infographic.

• Recognize achievements. It’s essential for employees to feel that their hard work is appreciated. This can create a sense of purpose and belonging in the workplace, and employees who feel they’re making a positive impact are more likely to stick around.
• Communicate openly and honestly. During times of economic uncertainty, it’s crucial to be transparent and authentic with employees. Open communication helps build trust and teamwork.
• Promote work-life balance. With increased workplace stress, supporting employees’ mental health and wellbeing can go a long way. Take this time to evaluate your workplace wellbeing program and make changes to boost employee physical, emotional and financial health.

Retaining employees during economic uncertainty can be challenging, particularly if employees are looking for higher pay, job security and an improvement in working conditions. By prioritizing employee satisfaction and providing tailored, holistic benefits packages, you can boost overall workplace morale and proactively improve retention.