Leading Happy Teams Through Crisis: 5 Ways to Keep Your Team Happy and Motivated in a Recession

Uh oh. What’s Plan B?

When a crisis hits your company, it can leave many leaders in a panic. What do you do when you face any of these situations:

  • A major product launch fails
  • The year ends way below your sales goals
  • A recession hits the economy, freezing many of your customer’s budgets
  • That next round of capital isn’t coming together as planned

Whether macro or micro factors, issues like these can force tough questions about layoffs and as well as a loss of momentum for your team and the company as a whole. 

A recession or any similar crisis presents several tough challenges for leaders at any level. As you try to save your company or team, these challenges can make it hard to maintain happy teams that are motivated and productive, compounding everything.

These challenge can hit your team in a variety of ways:

  • Layoffs and reorgs can leave everyone on your team wondering, “Am I next?”
  • Morale plummets over the fear of the state of the business, “Will any of us have jobs next month?”
  • Wage freezes, barring you from giving raises, even for the most deserving, makes your team think about if the grass is greener elsewhere.
  • Hiring and growth stop, so promotion opportunities are all on hold.
  • Your company many no longer be able to afford luxuries taken for granted like employee perks and special events.
  • Resentment can develop in employees due to any or all of the above, especially if it involves breaking promises made when things were going better.

So, what do you do?!?

Today, we’re going to teach you what to do to keep your team happy despite the challenges you’re facing caused by a crisis.

How to Keep Happy Teams in a Recession: Table of Contents

Before we can talk about the ways to keep your team happy, we need to tackle an important step that comes first.

If you don’t take this step, you can lose control of the situation from the very beginning, and it will be much, much harder to keep your team happy (not to mention loyal).

Open up to your team

This first step is probably the hardest. However, the only way you’re going to get through this is by first facing it– with your team.

How? By opening up to them and telling them the truth about what’s going on. 

Founder and Chief Product Officer Scott Belsky, author of The Messy Middle, wrote about tackling this challenge in his book:

“You must tell the truth without destroying the company. To do this, you must accept that you cannot change it, but you can assign meaning to it.”

Be honest and explain what’s happened and how, but don’t leave it at that. Tell them what you learned from the experience, whether you were affected by a sudden recession or adversity of another kind. Explain how what you learned will help you prevent it from happening again. 

Your company may have never gone through a recession or crisis like this before and you could find you were wholly unprepared. Then again, it may be a challenge you could have avoided. 

Once you’ve opened up and talked about what you’ve learned, offer potential solutions for getting back on track. Then, and most importantly, engage your team by involving them in those solutions and get their ideas to help.

Once you’ve done this, you’re off to a good start. Your team will appreciate your candor, and help you turn things around. You’ll also squash rumors that could otherwise run wild as people speculate on what’s going on.

From there, though, you still have to tackle the hardest step…

How do you get through layoffs? 

Companies revolve around the people that work there. They’re often the lion’s share of expenses, which is why in a recession, the first place a company looks to cut back is with its employees. That, unfortunately, means layoffs. 

If you’ve been hit hard by a recession or similarly financially-impactful event, the reality is that layoffs are probably unavoidable.

It’s better to let a portion of your staff go than to drive right off a cliff and suddenly have everyone unemployed.

No matter how you do it, layoffs are hard. However, the way you go about executing those layoffs makes all the difference on what happens after.

In The Hard Thing About Hard Things, Ben Horowitz talks about the time he spoke with legendary venture capitalist Doug Leone. Leone wanted to hear the story of how Horowitz had brought Opsware– whom he had just sold to Hewlett-Packard– back from the brink of death to be a $1.6 billion company. 

“After I took him through the details– including several near bankruptcies, a stock price of $0.35 per share, unlimited bad press, and three separate layoffs where we lost a total of four hundred employees– he was most amazed by the layoffs.”

Leone explained that in his twenty-year experience, he’d never seen a single company recover from consecutive layoffs: “He confessed that he’d bet against that every time.”

Cut once, cut deep, then turn the corner and don’t look back

The solution to avoiding consecutive layoffs?

Do everything in your power to stick to a single round of layoffs. 

Cut once, cut deep, then engage everyone on turning the corner together. If you have a second wave of layoffs, you’ll scare people into thinking it will never end and that can have all kinds of negative consequences. 

Employees will grow more distant, lose motivation, and begin looking elsewhere without you knowing it. 

In contrast, by:

  • Being open and transparent with your team
  • Sticking to that single wave of layoffs
  • Then immediately taking steps to move forward

You can retain the trust you’ve developed with your team members and keep employees motivated as you work on fixing the situation together.

With that said, the effects of the crisis are still at hand, and you’ll want to do everything you can to keep those remaining members of your team happy as you fight for survival in the coming weeks and months. 

The following tips can help you do that as they work hard for you through this crisis.

Leading Happy Teams Through Crisis: 5 Ways to Keep Your Team Happy and Motivated in a Recession

Even if the country doesn’t have a recession, companies and industries can fall on their own hard times. 

That’s why each of the points below applies just as much to those situations as they do a recession.

Here are five ways to keep your team happy and motivated: 

5 Ways to Keep Your Team Happy and Motivated in a Recession

1) Help them grow and add new skills

Just because wages and promotions are put on hold doesn’t mean they’ll stay that way forever. 

One of the best ways you can keep your team happy and engaged is by investing in their skills growth, even when you can’t promote them.

This does two things:

  1. It gives them a sense of progress now, which plays a major role in our happiness (See: Progress Principle)
  2. It prepares them so that they’re ready for the promotion as soon as the company is in a position to do so later (avoiding the Peter Principle)

Whatever growth opportunity you focus on for each team member, being explicit about it can really help. That way, they fully understand why you chose that project or responsibility for them.

happy teams are teams that make progress

The only limit here is your creativity. Growth can take many forms including:

  • Having them lead a project they’re passionate about and would be good for their resume.
  • Strategically choosing responsibilities that will help them grow…and fill in gaps left by laid off team members.
  • Letting them spend 10-20% of their time on a long shot, high potential reward project.
  • Using some of your saved time from having a smaller team to coach each person more.
  • And many more…

Best of all, your investment in their growth and development makes them more valuable in the job market.

Even if something does happen down the line and they unfortunately need to be let go, or the company fails, their new skills can help them with their next job.

Show them the value

It’s important to make sure that you frame this in a way that makes them buy in. You can’t push this on them.

Each of your team members needs to be convinced of the value and want to pursue this growth themselves. Otherwise, you’re just giving them more work.

As Dale Carnegie wrote in How to Win Friends and Influence People:

“Arouse in the other person an eager want. He who can do this has the whole world with him. He who cannot walks a lonely way.”

Get them to clearly understand what setting up a career development plan and investing in their professional skills growth will do for them. And, of course, listen to what they’re interested in to make sure you’re on the same page and it’s really a fit for what they want.

Whatever you pick together, make it clear this is a two-way street: it will benefit both the company now, and them the next time they’re searching for a job.  All of this while likely costing you little to nothing financially right now.

Looking for more on growing your employees, check out these posts:

5 Ways to Keep Your Team Happy and Motivated in a Recession

2) Use small thoughtful rewards over cash (and other forms of praise)

If you don’t have the big bucks for bonuses, raises, or parties, what’s a good alternative?

Replace the typical rewards with small, thoughtful gifts for your team. 

A small, inexpensive gift with thought put behind it can help build rapport as well as make them feel appreciated. 

For example, one simple way you can thank your employees is buying them a book or introducing them to a mentor. It costs you almost nothing and is a big plus for them.

Here are two more real-world examples: 

Under $10 (and a few minutes on eBay)

The reward doesn’t have to be something expensive. There are a ton of examples of gifts under $10 that are great ideas for a simple, thoughtful reward that will make your team member feel recognized. 

One example is this Mark Price figurine:

5 Ways to Keep Your Team Happy and Motivated in a Recession

Nate, an engineer I worked with at KISSmetrics, had been doing an amazing job lately and I wanted to show I appreciated the work he’d been doing.

He was a huge fan of retired Cleveland Cavalier Mark Price. So, after a few minutes on eBay and $10, I found something he ended up liking so much that it still sits on his desk to this day:

5 Ways to Keep Your Team Happy and Motivated in a Recession

Think about how easy it was to give something like that. A few minutes of creative thinking and searching had an impact that lasted forever. I’m still friends with Nate to do this day.

The next time you want to recognize an employee, consider taking a few minutes to find something small that they’ll enjoy to show your appreciation. 

Sweet recognition

Author and former financial executive Mark C Crowley used another similar practice to motivate the top performers in his company. 

Each month, Crowley would meet with his people and review their goals from the previous month. Everyone that hit their goal would be recognized at the meeting and rewarded with a bag of candy like the one below: 

5 Ways to Keep Your Team Happy and Motivated in a Recession

Crowley would toss the bag at them and recognize them in front of the rest of the team, giving them much-valued public recognition. 

Later, as he rose and began to manage other leaders, he’d give those bags of candy out as rewards that those leaders could share with their teams, making this recognition go even further.

While interviewing Crowley, he summarized his approach:

“If you have 30 people working for you and 25 of them met or exceeded the goal, you have to recognize all 25.

A lot of times we go, ‘Well, it’s like the Olympics, we’re just going to give gold, silver and bronze.’ If you want to destroy the spirit of the other 17 people that met their goals and your expectations, fail to acknowledge them.

People should know that if they meet your expectations and they meet the goals you set for them, that they’re going to get acknowledged.“

By offering this kind of regular recognition for everyone that hit their goals within the team, Crowley’s team consistently outperformed the other teams in the organization.

You don’t have to use candy, though. Any small, simple gesture of appreciation and recognition can have the same effect, whether it’s a thoughtful $10 gift based on something they like, or a sweet treat that becomes a symbol of recognition for having hit their goal.

If you’re creative, you don’t even have to buy anything at all. If you’re really not sure what to give, remember that praise is free recognition you can always dish out.

Use praise (it’s free)

Aside from physical gestures of appreciation and recognition, praise is a limitless tool you can use to recognize your team. 

Look for various ways you can positively reinforce the hard work your team is doing. This build their confidence and let them know you value and see the work they’re doing.

Even a simple thank you / good job email that costs $0 and takes minutes does the job. A handshake and a hand-written note costs pennies, but it has a powerful effect.

If the employee is remote, a gif can help convey just the right emotion. Like this:

Or this:

Or a quick private message at the end of the week:

Praise is free, only takes a moment to give out, and lets your people know that you value them and the work that they’re doing. That goes a long way toward keeping them happy and motivated, so use it often. 

Want more ideas on giving praise and to learn how to do it the right way?

These posts can help:

3) Find inexpensive perks

Another simple way you can keep your team happy during hard times is by looking to local businesses.

Everyone is hit in a recession. If you can find a business that your people like, negotiate a discount for everyone. As a result, they’ll get more business and you’ve made a small gesture for your team that they can take advantage of regularly. Every time they do, it will be a reminder of your thoughtfulness. 

In Laszlo Bock’s book, “Work Rules: Insights from Inside Google That Will Transform How You Live and Lead”, he talks about how many of the perks that Google has implemented for its employees actually cost little or nothing.

5 Ways to Keep Your Team Happy and Motivated in a Recession

How did they manage to do that? As it turns out, these businesses welcome the opportunity to sell to their employees. So, Google uses its bargaining power to acquire discounts for its employees that then benefit those businesses.

You might not have 100,000 employees, but several dozen or hundred employees will often be enough leverage to get a noticeable discount from local businesses interested in getting the extra foot traffic.  However, you won’t know though unless you ask.

4) A Win-win change: Offer flexibility

Millennials want flexibility at work. 

In fact, according to Mary Meeker’s Internet Trends Report, it’s the number two most valued work benefit:

mary meeker knows flexibility makes happy teams in a crisis, recession, or even good times.

In fact, most Millennials don’t even see a separation between work and home. Therefore, by giving them that added flexibility, you give them more power to work where and when they’re most productive.

This concept is particularly well described by HubSpot CEO Brian Halligan in his 2013 TEDx Talk

If you offer them to trade a little salary (which you couldn’t give them) for some flexibility, you can create a win-win situation by not only saving money but making them happier and potentially even more productive. 

This is especially big for people with families or painfully long commutes. It gives them a way of getting more of that precious time at home if they have a young family, or the flexibility for some outside activity that makes them happy like hiking. 

For you and your company, it can then pay you back in a few key ways:

  • They’ll spend some of that commute time savings working hard for you.
  • A happier, more relaxed team member will be both more agreeable during challenging discussions, and more productive as they work.
  • A flexible work schedule can often mean more deep work and focus time away from a distracting, open office.

To help make a flexible schedule work for everyone, consider creating a set work from home day, or a no meetings day for everyone. This ensures anyone using the flexibility isn’t missing key meetings.

What if it’s bad timing, or a key employee?

“This sounds great,” you might be thinking, “but what if it’s a really busy time of year or a key employee that wants some flexibility?”

Do it, even then. 

As we talked about above, giving your employees flexibility isn’t just going to make them happier. It can make a huge difference to your bottom line and their personal lives.

Here’s a story to illustrate why it’s worth even letting your key employees have this kind of flexibility.

A life changing exception to a rule

A friend of mine ran an accounting firm for years. One day, they were recounting to me how one of their top performers asked to take a long vacation in the middle of tax season. 

Normally, this would be a hard no. It’s the busiest point in the year and they were too important. 

However, he knew this was a special situation: the employee’s parents were going on a cruise and all their children and grandchildren were coming.

They did not want to miss this. 

My friend let them go as long as they promised it would not affect them hitting their deadlines for their clients for tax season. So, they went on vacation, and thanks to hard work both before and after the trip, they still managed to deliver on all their deadlines. 

Most telling, though, was something they learned years later: The employee’s father died 2 months after the cruise.

It was the last time they saw their father, and that chance almost didn’t happen.

It meant the world to the employee that they got to be there. They have pictures and memories that will be with them and their children forever.

And what did this do for my friend, their manager? Not only did the employee deliver for all their clients (and thus the company), it led to such loyalty that the employee stayed with the company for nearly two decades. 

Would you do this for your team?

If you’re thinking about allowing some remote work, keep in mind these pitfalls and tips:

5 Ways to Keep Your Team Happy and Motivated in a Recession

5) Listen carefully in your one on ones

After layoffs, people can feel nervous about their job, asking themselves, “Am I next?” or “Are we going to make it?”

They’ll pick up on your stress before you even realize it and look for signals that confirm their greatest concerns. To counteract this, treat your team like adults and talk to them about what’s going on in your one on ones to keep them informed. 

Let them ask questions and tell them how things are moving forward. The power of progress is as important as a team and company as it is for an individual’s work.

Stress at work can create stress at home, so keep them informed to avoid any major surprises. You’ll also want to continue to keep them involved in the process of trying to turn things around. 

If you’ve shown loyalty to your people, they’ll show loyalty to you. That includes wanting to be a part of the solution and success of your business.

As you work on the turn around, use your one on ones to engage them on solving problems, and progress on the ones you’ve already worked on. You may not be able to share everything, but for their areas of expertise, definitely tap into it.

Toyota knows the value of getting feedback and ideas from everyone. Their “Total Production System” is specifically designed to get feedback from everyone.

This allows good ideas to rise up from anywhere in the company. In many cases, it’s easier for those working on the assembly line to recognize inefficiencies, cost saving opportunities, and ideas for improvement as they do their work. But without a system to listen to them, they’d never hear them.

5 Ways to Keep Your Team Happy and Motivated in a Recession

Use your one on ones as a vehicle for building trust and loyalty

Your one on ones should be used as a means of maintaining open communication and to address concerns and questions you both have. 

Essential to this process is to make sure you keep your promises and progress is made meeting to meeting.

This ensures that every meeting feels different and better than the one before. Turning the corner may be hard, but even a little momentum can snowball.

To create this momentum, ensure you end each 1 on 1 by clearly establishing next steps for both of you.

accountable 1 on 1s make for happy teams
Lighthouse makes actionable 1 on 1s easy, organized, & automatic

Then, make sure you keep your promises by next time. You’ll find when you close the loop in the next meeting, their spirits are a bit higher, and you have new good things to talk about. [Ed. Note: Lighthouse is purpose built to help you do this and a lot more to have great 1 on 1s.]

The alternative is much darker: your 1 on 1s become broken records, your team becomes less and less engaged, and you miss out on their ideas to help turn the corner.

Avoid all that by making sure there’s as much action as talk in your 1 on 1s.

Further reading:

being a good company matters because things always go wrong and you need happy teams to survive

Happy teams are loyal and motivated teams

Keeping your team happy and motivated during a recession or company crisis isn’t easy. 

It takes courage to lead a team of people after layoffs. As a leader, you have to be strong for those that depend on you daily, and work with them to turn the corner.

Fortunately, there’s a lot you can do as a leader to make the situation better.

And the great part is, you don’t have to do everything yourself. The odds of success are much higher if you engage your team in the process of making those improvements and moving forward together. 

In fact, especially your best people want to help. They will enjoy the chance to be challenged, and value seeing their feedback is being heard and often implemented.

As a result, those same team members will become happier and more motivated, possibly creating even stronger loyalty than you ever had before the crisis. 

To learn more about leading happier and more successful teams despite challenges, check out the links below:

And if you want to stay organized on all your 1 on 1s in one place, and make the most of these key conversations you have through both good & bad times, sign up for a free trial of Lighthouse here.