Managing the Workforce in Economic Uncertainty 

The following article first appeared in the Insights section of Mercer’s website. It is reposted here with permission.

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It is not often that there is such economic volatility as is happening now for the retail and consumer goods industry, and broader society.

However, since the spring of 2020, the uncertainty of events is increasingly having an impact on workforces and employers.

In case it continues to happen, we may experience a regular whipsaw effect on wages and worker mental health.

Specifically happening today, based on supply and demand, if there is no product to put on trucks, in warehouses and store shelves, employers may not be open to hire or address worker compensation and health.

The pressing nature of short-term issues often overshadows the ability to engage at work.

Yet, when supply is restored, employers may look to re-hire or hire at higher wage rates to attract talent to work. The events cause a variability whipsaw in the workforce and to workers.

In variability situations, the pressing nature of short-term issues often overshadows the ability to engage at work.

For example, we know from Mercer’s 2023-2024 Inside Employees’ Minds Study that workers are expressing that meeting their daily expenses and other financial needs are contributing to stressors that negatively impact mental health.

We are sharing the following actions that employers can take to maintain workforce engagement and mitigate the variability whipsaw.

While some of these actions directly address long-term financial actions, each one is a proposal to help employers and workers during economic uncertainty.

Workforce Planning

Companies can make informed decisions that also reduce volatility in worker schedules and employment that answers the question, “Will I have a job tomorrow?”

Effective workforce planning is forecasting future workforce requirements based on factors such as business goals and market data points like industry trends and anticipated changes in the labor market.

This information can be used to develop strategies to attract, motivate, and grow the organization’s workforce capability, but also manage people costs and expenses in a more responsible way.

Communication

Challenging times should be addressed through communication with employees.

Share information about the current situation and potential impacts. Be clear and concise by avoiding jargon or complex language that may confuse people.

Clearly articulate company plans using empathy and understanding towards employees.

By prioritizing effective communication during times of economic uncertainty, organizations can foster trust, maintain engagement, and navigate through challenges more effectively.

Mental Health

The desire for mental health attention remains high since the pandemic.

When events are uncertain as they are today, employee assistance programs are seeing a steady increase in requests from employees for mental health services.

The programs are offering self-help, educational materials, coaching and therapy. It’s critical that employers are meeting mental health needs and an EAP and counseling are made available to workers.

Workforce engagement—while difficult to measure—is a critical component to business success.

Through workforce planning, employee communication and providing well-being support, employers can better prepare their people and operations for economic uncertainty.

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About the author: David Kopsch is head of Mercer’s Retail and Consumer Goods Industry Practice.