Learn more about how one manufacturing company reduced lost-time MSD injuries by 100% in just one year.
3 Unconventional Ways to "Recession-Proof" Your Business (and Employees)
Three unconventional approaches to ensuring your business, and employees, are recession-proof.
CEO of JPMorgan Chase & Co (NYSE: JPM) (NYSE: JPM), Jamie Dimon, issued a chilling warning about the economy on CNBC's "Squawk Box". Dimon referenced consumers having $1.5 trillion in excess savings from Covid pandemic stimulus programs and are spending 10% more than they did in 2021. However, “Inflation is eroding everything I just said, and that trillion and a half dollars will run out sometime midyear next year,” Dimon said. “When you’re looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about.”
Whether you subscribe to the impending doom of a global recession, believe we are already in the middle of one, or have a more optimistic outlook, it's important to make sure your business is prepared for the worst-case scenario. There are many traditional ways to prepare for a recession like having an emergency fund, modifying your offerings, and reducing overhead, but we like to go against the grain. So, let's take a look at these 3 unconventional ways to "recession-proof" your business.
Outlast the Competition
Regardless of industry or economic environment, beating the competition is a primary goal for all businesses. However, in a recessionary environment, it is wise to modify the mindset from simply "beating" the competition, to "outlasting" the competition.
In recessionary environments, many businesses make the mistake of investing in the wrong areas while trying to beat the competition. They will cut employees, expand service offerings, and reduce employee benefits in order to try and save money while increasing profits. The only problem is... how do you "strike while the iron is hot" to create new revenue streams in uncharted markets without the adequate resources (re: employees) to pull it off successfully?
Saving money by downsizing your staff and increasing profits via new revenue streams may improve the company's balance sheet in the short term, but is it sustainable? How long can a business offer underdeveloped products and services from disengaged and burnt-out employees who you risk losing to a better opportunity with a company that values them? That's like trying to win a drag race in a car with no tires.
A company that keeps its employees happy while getting laser-focused on services and product offerings at which they already accel will not only outlast the competition but be putting themselves in a competitive advantage when the economy turns around.
According to research from Gallup, "The cost of replacing an individual employee can range from one-half to two times the employee's annual salary -- and that's a conservative estimate. A 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year." How does an extra $2.6 million in expenses first thing after navigating a recession sound to you?
The bottom line is that the company that maintains its team and services, even if it results in a temporarily slimmer profit margin, won't be scrambling to recruit, hire, and train employees to provide exceptional services and products when customers come back full force or pay the associated costs from turnover. The company that cuts its team to the bone and starts to push underdeveloped services and products to recover lost revenue will lose its most valuable contributors, innovators, and problem-solvers, crush morale, and be faced with expensive staffing challenges, customer service issues, and bloated offerings. These factors will dramatically slow recovery - if the company survives.
Invest in Employee Health and Wellness
Employees are a company's greatest asset. During recessionary times, employees already face a great deal of stress from a multitude of directions. Employers that are not only able to retain their talent, but are also able to maintain or increase their team's satisfaction, engagement, health, and wellness can survive the toughest of times.
According to Shawn Achor, the New York Times bestselling author of Big Potential, The Happiness Advantage and Before Happiness, "The single greatest advantage in the modern economy is a happy and engaged workforce. A decade of research proves that happiness raises nearly every business and educational outcome: raising sales by 37%, productivity by 31%, and accuracy on tasks by 19%, as well as a myriad of health and quality of life improvements."
According to a recent Gallop poll, 70% of the US workforce reports suffering discomfort due to a musculoskeletal injury. When you combine those numbers with the current research from the American Medical Association that indicates an employee in pain loses 5 ½ hours of productivity due to discomfort, quickly and efficiently addressing employee pain is not only crucial to overall employee health but also has significant implications for a company’s bottom line.
Pair the research on how important happy and healthy employees are to the success of a business, and how detrimental injuries can be to an employee's happiness and health, it's only logical to invest in programs that can not only reduce the direct costs of workplace injuries (claim costs, missed time, insurance premiums, etc.), but also the indirect costs associated with a decrease in productivity, efficiency, retention, and morale.
PAYtience - Be Patient
The gut reaction of many inexperienced business leaders when facing a recession is to panic. This is a natural fight-or-flight response to stress. According to Oracle Netsuite, "Several studies indicate that medium-to-large family businesses have particular success weathering economic downturns. Their success is partially credited to multiple generations having the wisdom and experience to patiently ride out the ups and downs of many business cycles."
While there is a time and place for aggressive moves; sometimes, it's better to maintain a sense of "normalcy" rather than a chaotic response of hasty decisions and short-sighted strategies. Patience PAYS - Get it? PAYtience?
Patience, however, doesn't mean complacency. It's important to continue to plan, strategize, and follow through on money-saving initiatives that can reduce the need to cut expenses. Investing in programs such as Briotix Health's injury prevention, enterprise ergonomic solutions, and physical therapy services can achieve several positive outcomes for your business during times of recession, including:
- Healthy and happy workers
- Increased productivity
- Increased retention
- Increased efficiency
- Improved morale
- Reduced workers' compensation costs
- Reduced insurance premiums
- Reduced missed or restricted work
- Reduced cost of ergonomic equipment
- Reduced physical therapy and doctors visits
- Reduced medical costs
With simple and affordable behavior modifications and training, employees can avoid - and your business can avoid - the costs associated with common ergonomic problems and injuries. When those injuries do occur, as illustrated with the charted results, Briotix Health can provide a significant return on investment when compared to traditional physical therapy.
Strategic Thinking Beyond the Recession
Recessions can be scary. However, for forward-thinking and proactive companies, recessions can be an incredible time of opportunity. The three tactics mentioned in this article just barely scrape the surface of what is needed in order to prepare for and survive a recession, but all great leaders understand that in order for a business to survive in any economic climate, protecting your greatest assets, the employees, must be at the top of the priority list.