This article was updated on August 16, 2023.
This article was updated on August 16, 2023.
According to the latest data from Innovation, Science and Economic Development Canada, insolvencies are up 30.9 per cent from a year earlier.
Recent years have been challenging for business. Not only have we faced a global pandemic and the invasion of Ukraine, with resulting supply chain disruptions, shortages of workers and, more recently, high rates of inflation and rising interest rates; now we find ourselves on the brink of the first real global recession in 14 years.
Household budgets are being tightened under the burden of weakening purchasing power and record levels of personal debt. Corporate revenues are down. Employees and investors are nervous. Businesses are trimming expenses and putting major investments on hold.
In this challenging environment, how should businesses communicate?
While businesses may be tempted to remain tight-lipped about difficulties and spending cuts, a more transparent approach is preferable. Acknowledge the economic challenges you face and explain your approach to navigating rough waters. Through clear explanations, you will instill confidence among your stakeholders and build a climate of trust.
Even if your financial straits are dire and your business needs to restructure, open channels of communication remain essential. For advice on communication during a restructuring, click here.
Investors (and stock analysts) wish to see that the company in which they have invested (or that they follow) is capable of sustaining operations through difficult times.
Employees require reassurance. Challenging times demand an empathetic open-door approach to human resource management. Now is the time to build a supportive corporate culture to instill loyalty among your troops.
Even if we do fall into recession, the current shortage of qualified labour is unlikely to dissipate. You don’t want your best employees to jump ship for the competition. Moreover, in today’s hybrid work environment, employers face the additional challenge of keeping a remote workforce engaged.
Long-term thinking is warranted. Workers will remember how their employer treated them in tough times. That emotional response reflects your employer brand. Engaged employees are loyal employees. You must not downplay the severity of a recession, but rather explain what you are doing to surmount it. Through your words and actions, you can demonstrate what differentiates you from other employers.
Customers communication is essential. Even if your clients are cutting down on their spending, that is no excuse for you to cut communication with them. Explain why you’ve had to raise prices. While they may have tightened their budgets, once the economy recovers, they will prove loyal to you, as a vendor who maintained an ongoing dialogue with them, and will resume purchasing from you, rather than your competitors.
Never forget that communication is a two-way street. Listening to your customer base is at least as important as speaking to it. Dialogue need not be costly. Social media channels allow businesses to take the pulse of their followers and respond to customer concerns in real time.
Strategic communications for tough economic times
Position your executives through regular publication of thought-leadership pieces. Your company will be seen as the go-to resource for information about your industry. Show leadership by being a conversation starter. Remain top-of-mind.
Consistent communication is best for the long term. Be the brand that is always there—in good times and in bad—for all those who rely on your company, whether for goods, services, employment, or a share of the profits.
In these challenging economic times, internal and external communications will require skill, a deep understanding of the complex issues at play, and sensitivity. From one end of the country to the other, NATIONAL’s team of experts can help you navigate through changes.
