Why & How To Boost Employee Engagement & Retention During Challenging Times

In today’s unpredictable economy, small and medium-sized business owners face mounting challenges – market fluctuations, rising costs, and evolving workforce dynamics. Amidst these turbulences, one asset stands out as your most valuable: your people. During these turbulent times, investing in your employees’ engagement and retention isn’t just a good idea; it’s a strategic necessity. Failing to prioritize your talent can lead to costly turnover, decreased productivity, and long-term instability. That’s why understanding the importance of this investment right now is just as important as how to do it effectively.

“Having led human resources at a major financial institution like TD, I can unequivocally state that an organization’s most enduring asset, particularly through periods of economic uncertainty, is its engaged workforce. Prioritizing employee engagement and retention isn’t merely an HR initiative; it’s a fundamental business imperative that directly fuels resilience, drives innovation, and builds lasting value. Businesses that neglect this critical investment risk their future.”

— Sue Cummings, Former Chief Human Resources Officer, TD Bank Group

Why Employee Engagement and Retention Are More Important Than Ever

During uncertain economic conditions, many businesses focus solely on short-term survival – reducing expenses, streamlining operations, or delaying expansion. But neglecting your team during these times can backfire dramatically. Engaged employees are more committed, innovative, and productive, contributing directly to your bottom line. Conversely, disengaged employees are less productive, more likely to leave, and can become a source of organizational instability – all of which compound existing challenges.

Ignoring engagement jeopardizes your business’s resilience and growth.

Recent studies emphasize these risks:

• Replacements cost between 30% and 200% of an employee’s annual salary. (Source: The Conference Board of Canada)
• Over 50% of Canadian workers report stress about job security, which hampers morale and productivity. (Source: Canadian Mental Health Association)
• Engaged employees are 21% more productive and more loyal, which offers a competitive advantage during tough times. (Source: Gallup, 2023)

If you’re not actively working to boost engagement and retain your key talent, your business risks falling behind in a competitive market.

The Critical Role of Employee Engagement and Retention in Business Success

Engagement is the emotional commitment an employee feels toward their work and organization. Engaged employees go above and beyond – they’re more resilient, innovative, and committed, essential qualities when facing market volatility.

Retention keeps your keeps your employees focused on reasons to stay rather than reasons to leave. While compensation is important, employee engagement often plays a significant role in loyalty and long-term commitment. Reducing turnover now not only saves money but also preserves your organizational knowledge and client relationships.

The stakes are high. During uncertain times, your ability to keep your team motivated and loyal can define your business’s ability to adapt and thrive.

The Consequences of Not Investing in Engagement and Retention

Neglecting your team during economic downturns can lead to:

• Higher turnover – costing significant resources and time
• Decreased productivity and quality of work
• Loss of institutional knowledge, complicating recovery
• Lower morale, breeding further disengagement
• Increased operational risks due to instability

These issues hit small to medium-sized businesses especially hard, as they rely heavily on a loyal, skilled workforce to sustain growth.

Proven Strategies to Boost Engagement and Retention

1. Communicate Transparently
Share organizational challenges and future plans openly. Transparency builds trust, reduces uncertainty, and fosters loyalty. If changes are required, communicate them in advance and explain “WHY” they are necessary.

2. Invest in Employee Development
Provide training opportunities and clear career paths. Employees who see a growth trajectory or feel supported in what they do are more likely to stay committed.

3. Recognize and Reward Efforts
Celebrate achievements regularly – publicly or privately – to boost morale and reinforce a culture of appreciation.

4. Support Mental Health & Wellbeing
Offer flexible work schedules and locations, mental health resources, and wellness programs. Organizations investing in mental health see a 20-30% reduction in absenteeism (Source: CMHA).

5. Build a Strong Company Culture
Promote shared values and foster a sense of belonging and purpose through team activities and internal communications.

6. Include Employees in Decision-Making
Empower staff by seeking their input when practicable. Feeling heard increases emotional investment in your organization.

7. Offer Competitive Renumeration, Benefits & Perks
Ensure salary (and bonus arrangements if appropriate) are benchmarked to ensure reasonable positioning within your industry and market. Flexible hours, remote work options, and wellbeing days demonstrate your commitment to employee health.

The Vital Role of Leadership

Authentic, empathetic leadership is the cornerstone of engagement. Leaders who communicate openly, demonstrate transparency, and support their teams build resilience and loyalty – especially in uncertain times. Investing in leadership development ensures your managers support their teams effectively, boosting morale and reducing turnover.

Measure and Adapt Your Strategy

Regular feedback through surveys, one-on-ones and engagement metrics helps you identify issues early. Be agile – adjust your initiatives based on insights to continually foster a motivated, loyal workforce, and ensure you action the commitments you make to your employees .

Key Takeaways

• Engaged employees are 21% more productive and more likely to stay, directly contributing to your organization’s success.
• High employee turnover costs organizations between 30% and 200% of an employee’s annual salary, making retention efforts financially essential.
• Supporting mental health and wellbeing can reduce absenteeism by 20-30%, resulting in a healthier, more resilient workforce.
• Strong, empathetic leadership is a key driver of employee engagement – investing in leadership development pays dividends.
• Regularly measuring engagement and being responsive to employee feedback ensures your retention strategies remain effective and relevant.

Why It Matters Now

In uncertain economic times, the difference between a thriving business and one struggling to survive often hinges on your people. Engaged, loyal employees can adapt quickly to change, innovate under pressure, and help ensure operational continuity. Conversely, disengaged staff or high turnover can magnify your challenges, drain resources, and undermine your competitive edge.

Investing in employee engagement and retention today is not just a morale booster – it’s a strategic move that safeguards your organization’s future. The organizations that prioritize their workforce during turbulent times are far more likely to emerge more resilient, innovative, and positioned for long-term success.

Next Step

Ready to unlock and strengthen your business’s value through strategic talent management and other critical drivers? At Rizolve Partners, we understand the unique challenges faced by small and medium-sized Canadian businesses. We specialize in helping business owners build more resilient, engaged, and ultimately more valuable companies. Contact us today for a personalized consultation.