An economic recession is a retraction phase in the business cycle. In short, it’s a period when the economy stops growing.
In the current case, the retraction probably started late last year and should last through the middle of next year, although this is a point of great debate. Economic recessions are usually induced by deteriorating business conditions and then fueled by a loss in consumer or business confidence.
Recessions create hard times for businesses everywhere, causing them to pull back on investments and cut back staff hours and/or pay. Today, everyone is feeling the impact of the economic recession. I’ve talked to a few people that were laid off and others who have had to take a pay cut to keep their jobs.
While economic recessions are beyond our control, the creation of personal recessions is not. By personal recession, I mean a retraction phase in the personal growth and happiness cycle. Much like economies, individuals have their own up and down cycles too. These recessions are induced by crumbling professional and personal conditions, leading to a loss in personal confidence and security.
I think that companies roll their problems down to their people and often convert economic recessions in mass personal recessions – which is a tragedy. How does this happen? First pay gets cut, then job security grows scarce. Managers and owners become less engaged with their troops and little mentorship and coaching occurs. Training programs are considered luxuries and celebrations or recognition programs shrivel up. Employees, already feeling the financial brunt of the recession, stop growing and become unhappy.
This is preventable! If you own a small business or manage people, you need to compensate for financial cutbacks by offering your intangibles (time, compassion, advice) to your employees to help them through these times. You need to encourage them to go to scheduled training classes and take their vacations as scheduled.
Believe me, if your company gets this wrong, it will pay the price when the economy comes back and job opportunities abound. People will never forget how you behaved at the bottom of the business cycle, and word of mouse will be your worst enemy.
A few days ago, my son’s employer took the entire team to an inexpensive dinner at a local restaurant. It rejuvenated the team, restored some personal confidence and averted what many other people are feeling today. That’s long view thinking, and will lead to a strong employer brand. During the dotcom crash, Yahoo employees lost much of their net worth and many faced losing their homes or cars. They’d come in every day with that “deer in the headlines” look. So I went on a “Refresh” campaign and traveled all over the United States, talking to managers about the importance of giving away intangibles to employees when money was scarce. Maybe you should start a “refresh” campaign too!