Navigating workforce challenges in a difficult economy

Recruitment is not only expensive, but also increasingly challenging in a tight labour market. Advertising, agency fees, onboarding and training costs can run into the thousands per hire. Add to that the lost productivity while a new recruit gets up to speed, and the real cost of turnover can be far greater than many realise. Retaining experienced staff also helps preserve the customer/client relationships and institutional knowledge – two things that are difficult to replace. 

Top Tips:

• Conduct “stay interviews” to understand why employees remain and what might tempt them to leave.
• Offer recognition and career progression opportunities, even when financial rewards are limited.
• Recognise contributions regularly—praise costs nothing.
• Review benefits and policies to ensure they reflect what employees value most.

With rising living costs, many employees are under financial strain. Yet businesses under pressure cannot always commit to pay rises without risking long-term sustainability. Providing alternative forms of support shows employees that their wellbeing is taken seriously, even if budgets are constrained. Financial wellbeing support, salary sacrifice schemes, and affordable perks can ease pressure on employees and reduce turnover risk – often at a fraction of the cost of a salary increase.

Top Tips:

• Explore salary sacrifice schemes such as cycle-to-work or tech purchase plans.
• Offer financial wellbeing workshops or access to money management tools.
• Promote low-cost perks like discount platforms, flexible working, or wellbeing days.
• Review the existing pension scheme and consider introducing a salary sacrifice scheme if not already available.

In times of economic uncertainty, employees are often most concerned about job security. A lack of information can quickly lead to rumours, disengagement, or even premature resignations. Proactive communication from leaders reassures employees, strengthens trust, and helps prevent distraction. Even when there are no clear answers, being transparent about what is known (and unknown) is far better than leaving a void. Clear and consistent communication is essential.

Top Tips:

• Schedule regular updates—monthly or quarterly all-staff briefings work well.
• Ensure managers are briefed and equipped to cascade messages consistently.
• Be transparent about challenges as well as successes.
• Encourage managers to hold one-to-ones where employees can ask questions openly.

The economy is shifting, and so are skills requirements. Businesses that can pivot quickly are more likely to weather downturns and seize opportunities in recovery. Upskilling employees strengthens internal capability, reduces dependence on external hiring, and demonstrates investment in people. It also improves retention, as employees who feel they are developing are more likely to stay, even when financial rewards are limited. 

Top Tips:

• Identify critical skills gaps that could impact delivery or growth.
• Create internal mentoring or buddying programmes.
• Use free or low-cost online learning platforms for targeted skills development.
• Encourage cross-functional projects. Mentoring, or job shadowing schemes so staff can build wider business knowledge and encourage knowledge transfer.

Workforce structures that suited business conditions two years ago may no longer be sustainable. Reviewing contracts, staffing models, and resourcing strategies helps employers ensure they can scale operations up or down as needed. This agility is particularly important in today’s climate, where demand can shift quickly. Proactive workforce planning also reduces legal and financial risk, and ensures employers are prepared for recovery when the economy improves. 

Top Tips:

• Audit staffing levels against current and forecast demand.
• Review employment contracts to ensure they reflect flexibility needs while remaining compliant.
• Scenario-plan: “What if demand drops 20%?” and “What if demand increases 30%?”