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Supporting your people during a recession

As the Bank of England warns that we could be facing our longest recession since records began, with the economic downturn expected to extend well into 2024, many businesses are facing rising costs, shrinking profits, and tough decisions. Similarly, employees are worried about soaring prices, a string of redundancies they’ve seen at high-profile companies, and uncertainty over what comes next.

Leading executives across high-growth businesses are telling us how concerned their employees are about the cost of living. In a study conducted for Hawthorn earlier this year, they told us that employees were worrying about the recession, a lack of job security, risk of redundancy, recruitment freeze, lack of pay increase, and employee retention.

The companies that will best weather this storm and come out the other side in the strongest position, are those that protect their greatest asset: their people. But what can a company do to support their employees during a recession?

  1. Talk to your people

At a time like this, it is critical to communicate regularly, consistently, and transparently with your employees. Talking openly and honestly about the company’s current situation, performance, market conditions, and plans for the future, on a regular basis, will keep employees engaged and make sure they’re in the right headspace to weather the current storm.

  1. Listen to your people

At all times, particularly during times of uncertainty and stress, employees need to feel heard. Company forums can be used to capture employee sentiment and employees should be involved in the decision-making process and co-creating solutions to the company’s problems. This is a great way in which a business could find some of the most innovative responses to the problems they are facing. co-create the solutions with them. When people feel trusted and needed and an integral part of the team, they become more committed to the organisation and its success.

  1. Avoid redundancies where possible

Don’t panic and rush to make redundancies. Some will say they are inevitable, but sometimes they can be a false economy. A string of lay-offs can have a wide and lasting impact on an organisation – not just those who are laid off. If not managed carefully and thoughtfully, redundancies negatively affect employees who are left behind. There are alternative options to be considered before landing on redundancies. You can read more in our article Definitely not the separation we would have wanted.

  1. ‘Working harder, with less’ is not the answer

If a company does have to make redundancies, introduce hiring freezes, or slim down resources, it’s important to adjust an employee’s expectations. Companies will need to communicate what the organisation is doing to ensure everyone can still do their job, at the same time as trying to save money by streamlining processes, systems, and driving a bigger programme of efficiencies. People will need to understand what these changes mean for their workload, priorities and how the organisation is going to adjust; a company can’t expect employees to continue working as hard as before on fewer resources.

  1. “Working harder, for less” isn’t the answer either

During an economic downturn, companies will inevitably need to make savings somewhere, however the best companies will ensure that their people are adequately rewarded for their work. Companies should take time to review their employee value proposition to ensure the benefits of working for their organisation are relevant for employees and are in line with their needs during this time. Even though money is tight, and businesses may not be able to offer employees a pay rise, companies must explore other routes to show financial support – such as benefits. Doing so will go a long way in boosting team spirit and showing people they are appreciated.

  1. Upskill your employees

Upskilling and reskilling your people will not only help to fill any experience or skills gaps as a result of turnover, redundancies, or hiring freezes, but it will also help support employee engagement and retention. This is because the company is showing their employees that even though the economy may have stalled, their careers have not. Ensure your employees know what opportunities are available for them to take on new roles or leadership positions, step-up, take on stretch assignments, and receive/provide mentorship.

  1. Empathetic leadership

Leaders – at all levels – are one of any company’s greatest assets when it comes to shaping the culture people and the organisation need to thrive. It is essential they are equipped to support, lead by example, and effectively communicate. People will be looking to their leaders for support and reassurance. Thoughtful leadership during challenging times builds the kind of loyalty that retains employees.

  1. Wellbeing

Employees may already be feeling stressed, burnt-out, and over-worked. In fact, according to the World Health Organisation, in the first year of the pandemic the global prevalence of anxiety and depression increased by 25%. This is only likely to be further exacerbated by entering the longest recession since records began.

Companies need to ensure they are clear about what support is available for their employees, who they can speak to, and what wellbeing initiatives are available to them. There are also small things that can be done like ensuring people take their holiday and creating time to take a break and connect as a team.

It will be critical for companies to really focus down on these areas to retain a strong workplace culture and avoid low morale, poor engagement, and to retain their people. Employees need reassurance, a supportive environment, and to know that you are all in it together.

By Sarah-Jane Wakefield, Head of Employee Communication and Engagement, and Arabella Kofi, Employee Communication and Engagement Executive

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Future of leadership

By Sarah Sands, Partner

The Platinum Jubilee celebrations were about 70 years of history but they also turned into a discussion of the character of leadership. The Queen is an outstanding example of servant leadership. As Charles Moore wrote in the Daily Telegraph, the Queen’s role is that of sacrificial service. She does not seek power, her motivation is vocational.

Commentators have contrasted this selflessness with political leadership which is about grasping and retaining power. George Osborne is quoted as saying about the potential coup against the Prime Minister: “Power is not given, it is taken.”

With handy timing, Hawthorn Advisors and Spencer Stuart, both of whom work with corporate leaders and search for them (we’d prefer “find and advise them”) held a dinner on the theme of the future of leadership.

The premise of the discussion was that we are undergoing a generational change in expectations of leadership. Power cannot be assumed, it has to be earned and new qualities of collaboration and empathy are required.

We are witnessing a passing of conventional leaders and followers and in its place a new form of social contract. While we see old style authoritarian leadership across the globe – most tragically in Russia – it is on the wane in corporations. Prepare for challenge – if not quite as dramatically as seen at Westminster.

Hawthorn Advisors and Spencer Stuart assembled for their round table discussion leaders of the future and the present. There were two One Young World ambassadors, Zubair Junjunia and Dara Latinwo. Zubair is an educational activist who founded ZNotes an online learning platform which reaches 3.5 million global students. Dara creates digital disruption at Deloitte.

Also at the table, representing experience and optimism, was John Flint, the former group chief executive of HSBC and now the chief executive of the UK Infrastructure Bank. Next to him, was Freshta Karim, founder of the charity Charmaghz, which runs a mobile library in Afghanistan. Freshta represents the beacon of citizen leadership. When the Taliban outlawed girls’ education, Freshta devised a way of allowing them to read.

Dr Eliza Filby provided academic credentials for our theories, drawing on her work on Generational Intelligence, from baby boomers through to post 2010 generation alpha. Poppy Mills represents transformational change, as the director of Ubitricity, formerly working on Shell’s renewables business. Sasha Dabliz, head of marketing at Waverton Investment Management knows how to direct the flow of money responsibly and profitably.

Kristina Ribas, senior strategy manager at Shell, who began her career at Goldman Sachs, was also questioning of traditional routes and warned of the conflict of using past leadership models to predict the future. Stephanie Edwards, Head of Sectors Strategy at Cop26 was at the heart of transformation, while Charlotte Appleyard, Deputy Director of Development at the Royal Academy of Arts showed the pluck of a young woman leading distinguished elders down new paths. This, said Katy Jarratt, from Spencer Stuart, was the way of the future. Spencer Stuart are busy appointing under 35s to boards and watching the response of the 60 year olds who must answer to them. Generational Intelligence in action.

John Evans, CEO of Hawthorn Advisors, described the entrepreneurial opportunities and challenges of rapid growth with a diverse work force. Zubair began the discussion by talking of motivating volunteers; this requires passion, purpose and mission rather than didactic instruction. John Flint called this catalyst leadership. He also defined the boundaries of leadership; you can set a strategy but you cannot “ lead” on process, such as technology. You are leading people. He added, with the wryness of experience: “ You have to know yourself, and knowledge comes with scars.” You can avoid vulnerability by staying behind your desk but only by risking vulnerability can you achieve a modern kind of leadership. There are two ways of leading, by fear and money, or positively. Inspiration has the longest tail.

Eliza agreed that change has come.

“There has been 30 years of turning humans into robots and robots into humans.”

What does it mean to talk of human leadership? Sasha asked about the evolution of leadership. Are leaders born or made? Learning is now a more communal process and the new work force is drawn to the creative and the unconventional. John Evans called for the alchemy of new ideas combined with experience. Theories have to work in practice.

Dara pointed out that we look for omnipotent leaders in our entertainment, the Marvel superhero. How does that square with vulnerability? Dara posited that leadership needn’t be visible and voluble. It could be invisible and valuable. Mobile libraries in Afghanistan could be an example of leadership as doing good. If leadership becomes communal there are consequences to that. Katy asked which leaders are prepared to take on all the baggage of others. Narcissism is a familiar characteristic of leadership, even among the good leaders. The dangers of leadership were underlined by Eliza – it can’t just be about an ability to have followers. This allows for populists and maniacs.

Freshta talked of the hard choices affecting leadership, including engaging with the oppressor. She said that the leadership open to all of us, is to do what we can, and to encourage open debate even if means sacrificing popularity, or worse. Freshta’s aim is to work for a “ better truth,” through grass roots platforms. Leadership is a facilitation of this. Leadership also demands example.

Several round the table warned about corporate spin without substance. Beware those who got to the top merely by having the sharpest elbows and the determination to shape their own mythology. The different framing of leadership for women and for men was also raised. Eliza picked up that Poppy used the word “ accessible “ leadership rather than “vulnerable. ” Poppy agreed she chose the word carefully. Women are wary of being described as vulnerable.

Charlotte pointed out that leadership under scrutiny changes expectations. Decisions made in jobs in which the public have an awareness or a stake are much more glaring. Stephanie spoke up for the outliers, the radicals, for example on climate, who push the boundaries so that the middle ground shifts slightly for the realists and the pragmatists. She also laid down one essential for leadership, evidence that you care for those who work for you. James Nicoll at Spencer Stuart added the virtues of resilience and empathy.

Who got the table’s votes as role model leaders? John chose Alison Rose, Chief Executive of NatWest Group as an example of modern leadership, Eliza went for Margaret Thatcher as a leader who led rather than followed, Sasha chose Peter Harrison, CEO of Schroders, for his moral compass and for wearing leadership lightly. John Flint said those who speak truth to power and named Alexei Navalny and in happily different circumstances, his predecessor at HSBC Stuart Gulliver.

Freshta wanted a leader who could end wars, Stephanie called for Dame Barbara Woodward, UK ambassador to the UN, Charlotte for former US ambassador to the UK Matthew Barzun and for the artist Ai Weiwei, Dara for Sasha Romanovitch, former CEO of Grant Thornton, for sticking to principles, Katy for Bernard Looney, CEO of BP who leads with vulnerability and transparency. Turning to the world of sport, James Nicoll of Spencer Stuart suggested Toto Wolff, the CEO of the Mercedes-AMG F1 team, who leads through a management style of empathy and empowerment. Zubair thought for a bit, then came back with Muhammad Yanus, the Bangladeshi social entrepreneur who pioneered microcredit. All leaders who make a difference rather than serving time.

The collaborative nature of the evening was achieved partly by swerving political leadership. Hard power is not the same as soft power. Hawthorn Advisors and Spencer Stuart will continue discussions of the nature of leadership through different forums and events during the next years.

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Jess Phillips, Labour Party MP on support of alienated voters and the role all businesses can play in supporting their employees who may be suffering from domestic violence

Following the poor performance of the Labour Party’s recent election results and the subsequent botched reshuffle, the direction of the Party remains very uncertain. Jess Phillips, Labour Party MP and Shadow Minister for Domestic Violence and Safeguarding, spoke to Hawthorn’s Sarah Sands on Tuesday 18th May.

Author of three books, including the Sunday Times Bestseller, ‘Truth to Power’ and the forthcoming ‘Everything you need to know about being an MP’, Jess is known as being one of Westminster’s most outspoken MPs. She spoke about how the party can win back the support of alienated voters as well as discussing the role all businesses can play in protecting and supporting their employees who may be suffering from domestic violence.

Listen to the replay of Sarah Sands in conversation with Jess Phillips, MP.

Speakers
Jess Phillips is a Labour Party politician who became the MP for the constituency of Birmingham Yardley at the 2015 general election. Jess has committed her life to improving the lives of others, especially the most vulnerable. Before becoming an MP, Jess worked for Women’s Aid in the West Midlands developing services for victims of domestic abuse, sexual violence, human trafficking and exploitation. She became a councillor in 2012, in this role she worked tirelessly to support residents, with her work being recognised when she became Birmingham’s first ever Victims Champion. Since becoming an MP, Jess has continued her fight to support those who need it the most and has earned a reputation for plain speaking since being elected, unfazed by threats and calling out sexist attitudes as she promotes women’s rights. Jess has written two bestselling books ‘Everywoman: One Woman’s Truth About Speaking The Truth’ and ‘Truth to Power: 7 Ways to Call Time on BS’.

Sarah Sands, Board Director at Hawthorn. Sarah joined Hawthorn from the BBC, where she was editor of the Today programme, Radio 4’s flagship news and current affairs programme. She was previously editor of the London Evening Standard, the first woman to edit The Sunday Telegraph and deputy editor of The Daily Telegraph. Sarah is Chair of the Gender Equality Advisory Council for G7 for 2021 and of the political think tank Bright Blue. She is also a Board Member of London First and Index on Censorship and is a Patron of the National Citizen Service.

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