Reacting To The Looming Recession
The signs of an upcoming recession are clear. The trillions of dollars printed during the pandemic coupled with the Russia-Ukraine conflict has caused unprecedented levels of inflation, high energy prices and extreme fuel shortages causing numerous businesses across the EU to file for bankruptcy and the UK economy to face the worst downturn of any advanced economy.
The question is not ‘if’ a recession is coming but ‘when’. During these times of uncertainty, it is important for any business owner to make sure that they focus on surviving these trying times and come out stronger at the end of this bust cycle. The two main strategies businesses must focus on to survive are:
- Increase the service quality they are providing to existing customers.
- Save costs by cutting expenses that are nice to have but not necessary.
It is quite difficult to find new customers at a time when everyone is looking to cut their costs so it’s best to focus on providing better services to your existing clientele. Another reason for this is that your existing clients are also looking for opportunities to save costs where they can and if your service does not appear necessary to them then you may become the victim of cost cutting. Hence it is crucial for you to not lose the business that you already have – a bird in hand is better than two in the bush.
As for saving costs, the most valuable resource you have is your workforce. This is the perfect opportunity to display leadership and win the trust of your people. Instead of opting for massive layoffs and downsizing the company, it is best to only let go of low performers and people who are not proactively exploring new problems to solve. As for people who are motivated, believe in the company’s vision and are willing to make sacrifices during difficult times, those are the real assets of the business who should be protected at all costs.
Great companies make sure that, during times of difficulties, all of the team suffers a little instead of some of the people suffering a lot. The higher a person’s position and pay is, the higher salary cut the person takes. Witnessing this sacrifice from their managers and seniors is what inspires juniors to go above and beyond their usual expectations. Implementing these strategies should ensure that your business not only survives the recession, but has a workforce ready to outperform your competition once the wheels of the economy start turning again.
If you need free consultation on managing your workforce or are interested in finding technical developers at an affordable rate, click the button below to get in touch.