Recession in the UK – how can employers prepare?

30 May 2022 / Insight posted in Article

Economists have been predicting a recession in the UK with an expectation there will be a major slowdown in the economy, with inflation set to rise above 10%.

So, what does this mean for employers? Unfortunately, often salary cuts, redundancies, pay freezes and recruitment freezes, usually with manufacturing and retail feeling the pinch before other sectors.

Whilst some of these actions may become necessary, it is still important for employers to think ahead, past the recession, and focus on retaining their best people, as they will be needed when the economy starts to bounce back.

Employee retention should become easier as more employees begin ranking job security above moving jobs for a higher salary (plus those higher salaries are less likely to exist). But once the recession has passed, employers will be much more likely to keep their best talent if they do the right things now.


So, what are some of the right things to do?

Be as transparent as possible (without scaring anyone!) about the business’ plans to tackle the effects of a recession. For example, you could prepare employees for the fact that there may be a need to redeploy people if you know demand is expected to reduce in one area of the business. Or you may need to think about reskilling people in readiness for redeployment. It is often worthwhile seeking to retrain good employees who know the business, especially when you are in a recruitment freeze.


Explore options around flexibility to the hours that employees work that may allow jobs to be retained.

If people can see that the business is being proactive in its workforce planning and is communicating as well as engaging with its employees in this regard, this should provide a certain level of security. The key is in careful messaging, the types of communication used and who is delivering the messages, as there is a fine balance between offering employees some security and making them feel uneasy.

If redundancies do become a necessity, how you deal with them as an employer can also be the difference between reputational damage and something a little more positive. If you give employees a negative experience as they leave, you can expect significant criticism on social media and reviewing platforms, leading to considerable damage to your reputation as an employer.
However, by going the extra mile, you can be viewed as supporting your departing employees, through providing traditional outplacement advice (such as help with CVs and interview training), helping create a compelling profile on LinkedIn, and leaving recommendations on their profile to make their job search that much easier.

These types of positive experiences will ensure valuable employees are more likely to stay with you through the recession – or return once you start rehiring.

If you would like any advice or support, please get in touch with a member of the Moore Kington Smith HR Consultancy team.