The global financial crisis following the COVID-19 pandemic led to many shifts in the workplace, including the Great Resignation and employees worldwide reassessing what they want from employers, prompting many companies to adopt an employee-centric workplace culture.

However, the fear of recent mass layoffs is growing simultaneously with employee expectations from their employers: over 60% of workers worry that they could lose their job due to the recession, affecting their overall mental health.

Stress and fear caused by this uncertainty negatively impact employee productivity and happiness in the workplace, resulting in huge financial losses for companies, low employee retention rates, and an inability to reach organizational goals.

This guide will help you navigate the ongoing recession with success by maintaining positive employee morale throughout the crisis.

8 best practices to improve workplace morale in the face of a recession

For today's top talent, healthy workplace culture and positive employee experience have become just as important as employee compensation. For this reason, many companies prioritize investing in employee engagement strategies to reduce turnover and absenteeism and increase employee satisfaction.

We’re bringing you eight best practices to help you boost the company morale high and maintain your team’s motivation, productivity, and happiness on a high level despite the recession.

1. Seek employee feedback frequently

Open communication and honest feedback is the first and most important step to ensuring high employee morale during a crisis. You won’t know what your workers need and what kind of problems they’re facing unless you ask.

In the modern work environment, a manager's job is to:

• Create and encourage a judgment-free feedback culture where everyone will focus on solutions rather than problems
• Create a space of trust and open communication
• Encourage open (but considerate) feedback among team members regardless of seniority

When everyone feels they can always turn to their colleagues and ask for suggestions or advice, the team will generate better results and feel better in the workplace. At the same time, your team members will feel free to come to you for help if they’re struggling.

Fostering communication this way will allow you to reassure your workers, talk to them openly about possible solutions for any issue, and stop high turnover from damaging your company.

2. Show employee appreciation to improve engagement

Appreciation and recognition initiatives are often regular practices in companies where employees are actively engaged and provide outstanding results. Building a culture of praise and recognition can help keep employees’ spirits up even during hard times.

When employees feel their efforts matter, they are motivated and more productive. A simple "Thanks for all the hard work" can move mountains. This is particularly important during uncertain times as it helps employees overcome their fear of losing a job.

Every company should implement a practice of showing appreciation to their team members because people should be encouraged to celebrate wins, big and small. During a crisis, celebrating even the smallest milestone, like a work anniversary, can be a great incentive for employees to maintain motivation and stay engaged in their jobs.

There’s also another side of the story. Almost 80% of employees say they’d like to receive recognition from their employer, while a significantly lower percentage of workers actually receive it. In vulnerable times like these, with mass quitting in mind, it’s not unusual for an employee to leave a job because they didn’t feel appreciated, despite the economic uncertainty.

A simple but effective move for companies is to build employee recognition programs and reward great work and commitment with praise, monetary benefits, and promotions.

3. Help your remote employees get to know each other

Interpersonal relationships help people overcome hardships in life more easily, and workplaces aren’t an exception. Fostering connections among your remote and hybrid staff members will help you build stable support systems for everyone in the organization.

Many people draw a thick line between personal and professional life, and that's legit. But, when you spend so much time within a particular group, it is impossible not to build relationships with some, if not all, colleagues. In fact, research suggests that people who have a best friend at the workplace are more likely to be engaged in their work. Some companies even reported a higher profit in teams where employees formed friendships, according to a Gallup study.

You can organize different types of events to encourage employees to get to know each other, depending on whether you run a fully remote or a hybrid team:

• Virtual and on-site team-building activities at least once a quarter (on a team level, cross-team, or company-wide)
• Slack channels meant for a casual chat about non-work-related topics
• Slack plugins and collaboration tools to connect employees and prompt them to participate in virtual coffee chats
• Flexible office spaces where employees based in the same location can meet up and spend their workday together

4. Create a level playing field for everyone

Remote work often triggers workplace discrimination in companies where business culture isn’t properly defined, so employers implementing a hybrid work model must thoughtfully approach it; otherwise, they risk losing some of the most valuable team members.

It is of the utmost importance to create a level playfield for onsite and offsite employees. Remote workers claim they sometimes feel excluded compared to their on-site peers, which shouldn’t be the case if your company values include results over hours. Some studies even report parent discrimination.

Exclusion can affect employees in two critical ways: they will either decide to leave because they won’t feel appreciated, or their performance quality will drop due to the lack of motivation and morale.

Managing remote teams is challenging, but once you allow your employees to work wherever they want, you must ensure everyone operates in optimal conditions. The very least you can do is to:

• Keep remote workers looped in in every important business conversation and decision
• Establish clear communication guidelines to avoid undeliberate exclusions
• Have regular one-on-one check-ins with everyone on your team

5. Support professional development and career growth

Continuous employee development can help employees feel appreciated and safe in their workplace, which positively affects overall team morale.

Capterra found that 87% of People and HR leaders were planning to focus heavily on learning and development programs as a strategy for employee retention. That doesn’t come as a surprise given that growth has been one of the most desirable perks for employees worldwide, and many claimed they’d be ready to leave an employer if they didn’t have opportunities to develop their skills.

Providing your employees with a chance to learn new skills and polish existing ones gives them peace of mind. If you help them stay up-to-date with the latest requirements of the job market, they won’t be unprepared for a job search should a layoff happen. At the same time, your company is gaining a competitive advantage as you’re adding to your workers’ skill set, and instilling a sense of loyalty in them, boosting your employee retention rate.

Other than building skills in specific fields, like IT, marketing, product design, and more, develop other relevant, both personal and professional, competencies in your employees. For example, consider a personal finance management workshop, soft skills coaching, and language courses.

6. Focus on mental health benefits

Fear of recession and non-stop changes in how we work today can affect employee wellness and cause stress, trouble sleeping, and burnout. To boost morale in your team, rethink your health benefits package and focus more on mental health.

Paid time off is one of the most affordable employee benefits (and also the most desirable one), so offering a Mental Health Day to your workers won’t be a huge expense, and it can have a big impact on their morale. Research shows worrying about money can negatively impact mental health, so it’s critical to address this issue early on. When they feel overwhelmed, employees can’t do their best work, and knowing they can take a day off to recharge without explaining the reasons to their manager relieves the pressure.

Other great ways to support mental health and help employees cope better with the challenges imposed by the looming recession include:

• Investing in employee wellness programs
• Using different wellness apps and tools
• Connecting employees with peer support groups
• Offering counseling sessions
• Fostering a culture of inclusion and belonging, where employees can speak up about their problems

7. Demonstrate genuine care

High staff morale is more common in teams where people care for each other on a personal level, not just professionally, so don’t forget to ask personal questions and celebrate personal wins.

It is easier to organize a birthday party for a colleague when you share the same physical space, but today, it is pretty manageable to organize virtual gatherings. For example, if a remote team member's birthday is coming up, talk to the rest of the team and arrange an online surprise party; you can even send them a gift.

In your team meetings, don’t just focus on work-related matters. Ask your teammates how they feel and if there’s anything you can help with. For instance, if a team member is financially struggling due to inflation, the company could offer a corresponding pay raise or financial support to help them cover work-related expenses or purchase equipment to ensure a seamless workflow.

Showing genuine care helps build trust within your team, which can be a critical factor for increasing employee morale and maintaining motivation.

8. Promote a healthy work-life balance

When people have a healthy work-life balance and spend time with friends, family, and pets or focus on their hobbies, they’re more likely to develop resilience, maintain motivation, and stay engaged even during difficult times.

Besides all the fantastic things remote work offers, it can be challenging because it makes people lose track of their working hours and free time. Flexibility is great, but it bit some people in the ass (pardon my French).

When you work from the comfort of your home, it doesn't seem like a problem to answer emails at 10 pm or work the whole night. Of course, that's ok if it happens once in a while, but it's not sustainable long-term.

Therefore, Human Resources and People Ops teams should encourage employees to have a work-life balance and not let them think they’ll need to work twice as hard to keep their job in a crisis. Burnout is real, and companies must focus on employee well-being. Finally, taking care of your team members leads to higher employee engagement because a happy employee is a productive employee.

It all comes down to company culture

Today, HR and People Ops experts join forces to create a company culture that represents the company mission and vision and resonates with employees' values and beliefs. The earlier mentioned employee-first approach is, therefore, an integral part of it, especially in a recession, when psychological pressure is taking its toll on everyone’s performance.

To retain their top talent and maintain their morale throughout the crisis, companies need to focus on mental health, financial education, and employee recognition more than ever.

To find out what strategies you can implement to increase employee engagement and build a happy team, stay on our blog and keep reading:

12 Employee Engagement Strategies That Work For Remote Teams

Engagement, retention, and more: Benefits of employee wellness programs