The world is currently at an inflection point with war, climate change and most notably economic slowdown. This means many businesses will struggle due to these multiple crises, with small and micro-enterprises being particularly vulnerable. While recession cannot be avoided, one can always prepare in terms of technology and platformisation so that the business can tide over the downturn and eventually ride on the returning positive momentum.
Experts believe that the recession plays into India’s strength. In fact, at a Bangalore Literature Festival, Infosys co-founder Kris Gopalakrishnan said that India is the best place to work when the world is going through a recession phase. Therefore, an economic downturn doesn’t necessarily spell doom for your company, instead, it could help highlight cracks in your business plans and help you build a stronger one.
The question arises: how? The road from recession to recovery was the focus of People Matters’ most recent LinkedIn Live session under its Big Question series. Panellists Elwinder Singh, who is the co-founder at Connect and Heal - CNH Care, V Krishnan, the Chief Human Resources Officer at Havells India Ltd and Shruti Swaroop, the Founder and Managing Consultant of EMBRACE Consulting, deliberated on ways to protect businesses against economic slowdown.
1. Cut down on discretionary spend
During testing times, it becomes crucial to change the behaviour of the firm. This may include taking several tough decisions which must head towards protecting existing revenue streams. The co-founder of CNH Care suggested compromising discretionary expenditure to focus on the long-term growth of the business. When it comes to picking between letting go of employees and non-essential expenses, the emphasis should be on safeguarding the company’s biggest assets – its people.
“The instability in the job market began when companies started hiring talents at a breakneck speed. However, now we are seeing the renormalisation, which is affecting employees in several departments. If we think from a cost optimisation perspective, cutting down on discretionary spending or unnecessary costs can benefit all companies,” Elwinder Singh said.
He further explained that “discretionary cost may not be the same for all firms. Certain costs may be unnecessary for some businesses but essential in others. Such as, donations can help in reputation management and tax benefits, but amidst crisis, a company can run without it.”
2. Separate noise from signal
It’s no secret that big tech firms are bleeding workers left and right. Major companies like Meta and Amazon laid off more than 20,000 employees. It didn’t take time for other tech majors to follow the suit. The result is today we are seeing layoffs piled up, with managers decrying overzealous hiring practices. Before taking such drastic steps, one must pause and “look at the data,” said the Chief Human Resources Officer at Havells India Ltd.
“The entire scenario of gloom and doom can be overwhelming. But, one should learn to separate noise from the signal by looking at a bit of data. For instance, while some major economies are suffering, in India, in the last 10 years GST collections have been consistently going up. Coal and electricity production has been almost at an all-time high and housing loan disbursement is going up,” explained V Krishnan.
3. Patience will pay off
In the world of work, the layoffs have created more unhappiness and uncertainty than any other challenge on the ground. A question that we need to ask ourselves is whether a job cut is a necessary step or just a lack of patience induced by the pressure coming from investors. “If we look at the numbers, more than 1,30,000 people have been issued pink slips in the last six months itself, creating a very disproportionate noise,” the Founder and Managing Consultant, EMBRACE Consulting, told People Matters.
“Having the patience to just step back and compare the current scenario can be a game-changer. If you compare the global scenario with what’s happening in India, you will see a huge difference. The World Economic Forum also says that between 2023 and 2024 we expect the highest growth and employment in India. Given that we have far more scope here, India is a great place to be during the global recession. The key is to have patience and give it time to pay off,” said Shruti Swaroop.
4. Workforce transformation
The cost of hiring an employee goes far beyond just paying for their salary. Bringing in exceptional talent can even cost more because, at the end of the day, these talents are continuously going to be in high demand. “That’s why a lot of emphasis needs to be given to reskilling and upskilling exercises since it's easier to retain talent as opposed to bringing in a new one,” stated Elwinder Singh.
5. Make employees feel valued with health benefits
The majority of leaders expanded health and wellness benefits for employees in the wake of the Covid-19 pandemic. Now that we are back to normal, many are wondering if the benefits induced by the pandemic should be discontinued. V Krishnan advised tweaking the benefits, instead of scrapping them completely.
“Covid has gone, but the health and wellness benefits must stay with some changes. Organisations must understand that these benefits are beyond Covid. It is about fostering a healthy workforce, retaining the best talents and keeping the employees happy and satisfied. Job satisfaction and retention are not achieved through monetary compensation alone, leaders must care for people who are taking care of their business,” CHRO of Havells India told PM.
6. Invest in employee mental health
Shruti Swaroop, who is also an executive coach and diversity inclusion consultant, believes the need for mental health wellness is now more than ever. She revealed employees of most organisations are under a lot of stress and are in a dire need of an employee assistance program. “The noise is creating stress among employees, which must be addressed. This will not only increase the retention rate but will also lead to a healthier and more productive workforce,” expressed the founder of EMBRACE Consulting.
To learn more from leaders about some of the burning questions in today’s world of work, stay tuned to People Matters' Big Question series on LinkedIn.