Over the last several months, many economic indicators have been pointing toward a recession, or at least a significant slowdown, in the U.S. economy.
Uncertainty around operations, consumers and the overall economy is fueled by:
- declining equity
- high inflation rates
- a cooling housing market
- reduced stock activity
Combined, these factors create an economic environment that has many businesses navigating the last quarter of 2022 with caution.
While the labor market appears strong — largely due to historically high numbers of open jobs and low unemployment — some economists expect the softening in the economy to eventually impact the labor market.
For business owners and HR leaders facing an economic slowdown, an organization’s health is more reliant on managing people decisions around:
- ROI
- hiring
- scheduling
- benefits administration
- compensation budgeting
- training and development
- labor allocation
While we can’t know for sure what the future will bring, having the support of the right HR technology is essential for any organization to succeed in the event of a recession. Here are three reasons why.
1. Improving efficiency
In the high-stakes climate of a recession, business leaders and HR departments must operate with precision, efficiency and a focus on the organization and its customers. What leaders and HR teams don’t have is time to deal with standard, repetitive tasks that increase administrative burdens.
Finding the right HR tech partner to help automate and streamline payroll is a must. Doing so relieves most administrative HR burdens, giving leaders time and space to focus on what really matters to the business.
The best HR tech also improves administrative efficiency by providing support in a single software. This helps make the transfer of information seamless and effortless throughout the employee life cycle. Many organizations have overloaded on HR solutions, using 16 apps on average according to Sapient Insights Group. Streamlining on a single app provides massive benefits like:
- accurate and consistent data
- a universal, easy-to-use interface
- just one provider to contact for support
The result? Everything related to HR is much easier to manage.
2. Empowering employees
Stress is bound to rise during times of economic uncertainty. According to Insight Global, an international staffing firm, 78% of workers are concerned about job security in a recession. They may be concerned about the rising cost of living or planning for the future and may have family members whose own jobs are a source of stress.
These employees need as much support as possible so they can continue contributing to their teams and the organization under increased pressure. The right HR tech helps alleviate employee stress and keep them on track.
An important way that HR tech provides employees with greater visibility and control is through a crucial aspect of their work: their pay. True, an employee’s pay reflects the promise their employer makes for time, effort and dedication. But it’s also bigger than that. Three out of five Americans are living check to check, according to a September 2022 Morning Consult survey commissioned by Paycom.
Ensuring payroll is accurate, transparent and in employees’ hands is even more important during hard economic times. Take an innovation like Beti®, for example, which guides employees to find and fix errors before payroll runs — right in the Paycom app. It even empowers workers to proactively resolve issues through Paycom’s intuitive communication tool, Ask Here. Ultimately, Beti gives employees the peace of mind they need to help make the best financial decisions for their situation.
3. Supporting managers
Managers, possibly the most important group of employees, have higher levels of stress, burnout and feelings of isolation than any other group in the workplace, according to a 2021 MetLife survey. In economic uncertainty, the burden placed on them is even greater.
Sadly, some of the most used HR tech has overlooked the needs of managers in favor of administrators and front-line employees. While those users are important, HR tech must prioritize managers’ needs to truly support an organization through a possible recession.
Your HR tech should provide managers with:
- visibility into their team’s PTO calendar
- the ability to view schedules, reassign shifts and approve shift swap requests
- readily approvable time sheets, punch changes, business expenses and PTO requests
And since many employers still need to hire new workers in slower economic times, managers also need to easily:
- view and add feedback to applications
- move candidates through the hiring process
- communicate with recruiters
Finally, all of these capabilities should be accessible through an easy-to-use app so managers can see information, make decisions and complete other necessary tasks anytime, anywhere. Doing so frees them to concentrate on more important tasks like developing employees and serving customers.
In economic uncertainty, managers need more support than ever. Give them the right tools to make their critical work easier.
The big picture
Business leaders, managers, HR and employees may all be worried about the possibility of a recession. While it may indeed be on the horizon into 2023, one of the best ways to prepare for tougher times is to have the right HR tech in place. This will help:
- streamline operations
- maximize ROI
- empower employees with their HR and payroll data
- make the right information available to managers and leaders
Explore Paycom and Beti, the employee-driven payroll experience, to learn how they help businesses navigate uncertain times.
DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.
