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All the signs point to an economic downturn on the horizon in 2023, so rather than thinking about the ‘if,’ it’s time to focus on the ‘how’ as your business will likely have to navigate uncertain times ahead.

One of the key challenges with any economic recession is maintaining a strong and productive workforce. Morale is certain to drop, and layoffs - a common way to cut costs in a recession - can make it difficult to achieve high levels of productivity.

In this guide, we’ll show you some of the best ways to effectively manage your employees during a recession.

1. Communicate with Transparency

At a time when rumors are flying around of mass layoffs and financial uncertainty in employees' lives, the worst thing you can do is feed fuel to the fire by staying silent.

Even though it may seem counterintuitive and that it might cause widespread panic in the workforce - being transparent in your communication is the best thing you can do during a recession.


Because when you’re honest and open with your employees, you create an environment of trust. This is much better than the alternative which we’ve seen with Big Tech in early 2023 - mass layoffs that come as a surprise, often communicated via an automated system or email.

Not only does it come across as cowardly to lay off a lot of employees during a recession with no prior notice, but it also diminishes any trust - and loyalty - your workforce has in the company.

Don’t take the risk and try to pull a fast one over your employees in a recession. If you have to cut costs and terminate some jobs, make it clear that this is going to happen ahead of time, so it doesn’t blindside your workforce.

There’s also the added comfort that comes from knowing what’s going to happen. In an economic recession, uncertainty is the only guarantee. That’s why being upfront and honest is refreshing, as it’s in short supply and lifts some of the fog of uncertainty employees experience.

2. Accommodate Each Employee

When you face the prospect of downsizing through layoffs, one of the best moves is to make each employee on your books feel as if they’re valued and that their voice is heard.

Creating a close-knit community is a great way of tightening work bonds, and it can support a healthy environment of collaboration and communication. In such an environment, you would listen to your employees and treat them as individuals.

One practical way you can accommodate the individuals that make up your workforce is to garner their views on compensation.

Here are some discussions you could have:

  • If layoffs are on the table, would employees take a pay cut to guarantee everyone’s job security?
  • Would employees prefer to forego perks and benefits schemes for a bump in their pay packet?
  • Would flexible work arrangements or a 4-day work week boost morale and productivity levels?

Showing that you care about your employees is paramount to creating a work environment that employees want to be a part of when times are tough.

Offering certain accommodations can be an excellent way to reach greater productivity levels by boosting employee morale and improving your retention rate. 

3. Boost Employee Engagement

On the topic of employee retention, the worst thing you can do in a recession is ignore your employees and increase the risk that they’ll jump ship to find a better work environment elsewhere.

One of the best ways to keep your employee retention rate high is to make sure your employees feel engaged with their work.

Employee engagement is one of the most reliable indicators of whether an individual is satisfied in their current role. By engagement, we mean to what extent the employee feels stimulated and challenged by the work they do on a daily basis.

So what are some practical steps you can take to boost employee engagement?

Give Personalized Feedback - No employee wants to feel as if they’re insignificant, yet you may be inadvertently giving this impression. If you don’t give personalized feedback and check in with employees or team members one-on-one, they’re unlikely to feel like a valued member of the workforce and more likely to disengage with their work.

Equip Employees with the Right Tools - The right tools can make all the difference. If employees have access to software that makes their job more enjoyable, it’s easier for them to find meaning in their actions. Likewise, if you use tools like Insightful, you can help support employees by identifying productivity trends and stepping in when necessary.

Provide Professional Development Opportunities - Many employees relish the opportunity to upskill and learn more about their trade. By laying on more opportunities, be it in the form of ELearning courses or mentorship schemes, you can make them feel as if their actions are helping them scale the career ladder.

The top employee monitoring software out there can also help you maximize employee engagement levels.


Productivity tracking software like Insightful allows you to monitor employee computers so that you can spot performance trends and step in when it seems like employees need support. 

Computer use tracking software or employee computer activity monitoring software serve an important function in workforce management as they give you access to data that can inform whether or not your employees are engaged with their work.

With this data, you can make changes and track the impact they have on performance.

4. Create a Culture of Resiliency

Resiliency should be the focus for many businesses heading into an economic recession.

Ultimately creating a culture of resiliency is about stabilizing during challenging times while also looking to the future.

Sustainable productivity is a hallmark of a resilient work culture, and it’s beneficial for everyone from executives to employees. Sustainable productivity is the idea that you don’t need to sacrifice well-being in order to hit your goals and objectives as a company.

No employee should be pushed to the point of burnout, as this implies that your workload distribution or processes aren’t working as intended - unless workloads were originally designed for maximum productivity with minimal regard for employee wellbeing.

Turn this traditional business practice of only focusing on the results on its head by prioritizing employee wellbeing, and you might just find that your productivity levels rise instead of fall.

Going into a recession, you want your workforce to be full of individuals that are both satisfied and engaged, as this will boost your retention rate and employee willingness to put in the work.

One of the best ways to maintain resilience in the face of change is to create a data-backed work culture. Using a remote work time tracker like Insightful can help you maximize operational performance by monitoring computers at work and keeping tabs on performance levels.

If you want to make influential changes in your workforce and better manage individual employees, you need to understand their data - which is where having an employee productivity dashboard can prove useful.

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