With a downturn expected, many executives will be focused on making cuts to protect the overall health of their businesses, but don’t let this attitude drive away valuable employees.
It’s been a decade since the horrific economic downturn of 2009, and the hotel industry seems to have recovered nicely, with increases in revenue per available room and global travel demand, not to mention literally being forced by consumers to get with it and more fully embrace technology.
In fact, RevPar pretty much increased month after month over the past 10 years, based on reports by STR, parent company of Hotel News Now. As usual, the industry has also continued to add rooms since the last recession—more than 500,000, according to an HNN article published earlier this year. But now, given geopolitical considerations, the current trade war and continued development, a recession appears to be on the horizon. Most of the senior industry leaders with whom I regularly speak with are definitely seeing a slowdown and expect a recession within the next 12 to 18 months. This isn’t happy news for anyone, and those of us who are veterans of at least one economic recession know the harm it causes our industry.
But this article isn’t about economics. It’s about your people.
A company’s typical response to a recession is to sharpen pencils, batten down the hatches, trim all unnecessary expenses, put growth plans on hold and weather the storm. Of course, that makes sense, because the business must be preserved. But a company is made up of people—what about the people?
From my vantage point, here’s what usually happens: Company executives focus on battening those hatches and totally fail to include employees in the communication link. This makes no business sense because the people are so valuable, and it costs time and money to find and train them. On top of that, I’d argue that most of your people don’t particularly want to leave the company, but the idea of a recession causes real fear. People speculate and worry about what survival action their company might take that could negatively impact them. So, in the absence of communication, they prepare a resume and start hedging their bets.
We see it with every recession, but it doesn’t need to be this way. One of the beautiful things about most of your employees is that they will rally during difficult times. They will be there for you but need to know that you are also there for them. When leadership fails to communicate, it isn’t leadership at all. Worse, the lack of communication puts the company at risk of losing good people. Don’t wait until the storm is upon us—take this as an early warning and be proactive. Have your top executives sit down with the various employee teams and share the “survival” plan, asking for their support, answering questions and discussing related issues. It may not be possible for every company to retain every employee when times are tough. But why chance losing those you definitely want to retain? Be honest and transparent. Communicate. Reassure. Recognize. See how your people can weather the storm with you, unite around a common cause and still be there when the sun comes out again.