Managing Recession Stress

The cracks haven’t yet appeared in New Zealand, but the impact of “staff recession stress” can be significant for employers. Human Resources Institute of New Zealand member, organisational psychologist Eugene Ng provides some advice for employers on managing stress levels in the current environment.

I’m seeing a change in the work ethic of New Zealand employees as they face job insecurity and recessionary pressures. People are working much harder and actively looking at how they can add value to their organisation, partly to prove their worth and justify their employment.

This is certainly a correction in mindset that needed to happen in New Zealand particularly amongst the ‘Gen Y’ workers who’ve not experienced the pressures of high unemployment and recession. Things have changed. There’s been a threefold increase in the number of people applying for jobs since last year and increased redundancies. The number of redundant workers coming to us for counselling has more than quadrupled.

While a change in our work ethic is positive, ongoing pressure on employees to do more for less in an environment of insecurity is unsustainable. As yet, there is no strong evidence of negative impacts on business, but I am hearing stories from employees of people working much longer and harder in many cases doing the work of two and morale is dropping. It goes without saying that pay rises are out of the question.

Unless employers address the situation, it will only be another six months before the cracks start to appear and businesses suffer. Some of the key measurable areas of high staff stress and insecurity include:

  • Reduced productivity
  • Increased errors
  • Deteriorating workplace behaviour such as emotional breakdowns and open protests
  • Poor health and fatigue with staff avoiding taking sick leave
  • Deteriorating workplace culture.

Customer relations also suffer as high stress levels will always affect the way staff with customer facing roles deal with clients. In the banking sector for example, I am aware that consultants are expected to take on two to three times more clients than the same time last year. This opens the way for poor customer service and an increased risk of errors.

For many employers, denial is the initial response and the focus is on trimming costs, gaining efficiencies to keep the business viable. One of the first budgets to be cut is the social budget a big mistake. Employers can get a lot of bang for their buck in terms of staff commitment, willingness to go the extra mile, team effort and morale from a few morning teas and regular after work drinks. Remove those small things and you send a major signal to your staff of where they stand. The impact on workplace culture is huge.

Some of the key things employers need to start considering now to prevent the cracks appearing include:

  • Job sizing Carry out a resourcing exercise. Look at how many full-time equivalents it takes to complete the tasks for each role as a measure of current workloads and expectations.
  • Streamline Work out what tasks are essential to business function, cleaning out the excess to ensure staff time and resources are being used efficiently.
  • Communication Keep employees informed at all levels about the company’s financial stability, what’s ahead in the short-term along with long term goals and outlooks. Indicate reasons for any changes and how staff can position themselves going forward.
  • Plan and educate Develop a workplace plan acknowledging workplace well-being and educate staff. Include a system which helps staff identify stress symptoms in their workmates and/or managers and provides a neutral point of contact to report and deal with it.
  • Manage insecurity Where redundancies are necessary, look at transferable skills. Employees whose jobs have been rationalised may be able to transfer to different departments. Where redundancies are threatened keep people informed and provide options.
  • Positivity Managers should focus on speaking positively, but realistically. It is important that as a leader you stay strong and help keep morale up.

* Staff targets – Ensure staff training and development and KPI targets are relevant to the current market. Unrealistic performance expectations will increase pressure. For example, sales managers should not be expected to meet last year’s revenue targets. Adjust the focus to developing customer relationships.

Built into New Zealand’s culture is an expectation that employers look after their staff. It’s up to employers now to find the balance between protecting the wellbeing of their key asset – their people – and gaining those much-needed efficiencies. Prove to your staff that you will support them and they’ll support you.

Eugene Ng is director of H2R Consulting; and a member of the Human Resources Institute of New Zealand.

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