Nobody can predict the future but chatter about an economic downturn often trickles down to the mental health of workers. Employees may feel anxiety about losing their job during a potential economic slowdown, causing stress at home and distraction at work. To strengthen employee morale and alleviate economic and recession anxiety, business leaders can set policies that encourage employee engagement and ensure their personal and professional balance.

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Show transparency to earn trust

While employers can reassure the team if business is strong, recession anxiety will intensify if employees perceive a lack of transparency from management. Employers may not be able to disclose details about the company’s financial performance but will build trust with an acknowledgement of the broader economic environment and a high-level discussion of its impact on earnings. Frank discussions of economic circumstances will also help employees prepare financially and emotionally should layoffs occur. Otherwise, employees may paradoxically feel greater anxiety as they wait for the other shoe to drop. Though employers may hesitate to share negative updates, frequent communication and honesty will leave employees with a realistic impression of the future instead of recession anxiety.

Emphasize the importance of work-life balance

After the pandemic reshaped the meaning of work-life balance, many companies began to offer flexible working schedules and remote work opportunities. Employees under stress about the financial climate may instead spend more time on the clock to strengthen their position at work without making gains to productivity. These additional hours can also reduce morale further and undermine work culture.

In times of economic anxiety, business leaders can set an example by continuing to use flexible work schedules and remote days. HR can also reassure employees that flexible work schedules remain in place and remind employees to use their remaining PTO days. For employees with unlimited PTO, HR can suggest a minimum number of days per year and help to identify the most optimal times to take a day off so employees feel secure using their benefits. Managers can also schedule downtime for the entire team to recharge and organize creative, low-cost bonding events like in-office or Zoom trivia to improve team morale.

Provide assistance and information about benefits

Though some employers may consider new benefits like gift card rewards, focusing on how existing benefits can aid employees is the first step. For instance, employees may not be fully aware of how to use mental health benefits to access therapy or meditation apps, both of which can play a powerful role in reducing chronic stress. Many employers also now offer employee assistance programs (EAPs), which provide employees with additional help at no extra cost in difficult circumstances such as a family illness or the job loss of a spouse. While employees may already have access to a benefits portal, an email update from HR with simple instructions on benefits can clarify confusion and spur action. Taking it a step further, consider whether any employees might feel comfortable sharing publicly how specific benefits helped their families.

Given recent media coverage of economic circumstances, employers and employees may feel doubt about the future, but business leaders can reduce anxiety by building trust through transparency, protecting work-life balance and ensuring employees use their benefits. It should also be noted that while the national unemployment rate is 3.5%, we are faring far better in Arizona with a 2.6% unemployment rate.


Author: Don Alix is a district manager with Insperity, a leading provider of human resources offering the most comprehensive suite of scalable HR solutions available in the marketplace. For more information about Insperity, call 800-465-3800 or visit