Employer-employee dynamics have already undergone a major shift in the last two years, and recent economic forecasts suggest that another transition could be up ahead.

Experts and policymakers across the US, UK, Singapore, and the world predict that we could be at the cusp of another recession in the next five-year period, although the extent of it remains uncertain.

In an announcement in May, Singapore’s Prime Minister Lee Hsien Loong spoke about the likelihood of a global recession occurring in the next two years, potentially by 2023 or 2024.

In the same month, Goldman Sachs Senior Chairman Lloyd Blankfein said that there is a very high risk of a US recession, and large companies should start preparing at the earliest. Goldman Sachs has even come out with a report recommending a necessary growth slowdown to help temper the rise in wages of employees.

Workers stand to face yet another period of uncertainty in employment, and organisations could likely frame return to office (RTO) policies in the employers’ favour.

There is already a disconnect between employer and employee sentiment around RTO. A study by Slack’s Future Forum consortium found that two-thirds of senior executives believe they are very transparent about their post-pandemic policies, while less than half of workers agree.

Likewise, nearly half of senior executives want to work from the office every day, compared to just 17 per cent of workers. Both a symptom and cause for this disconnect is the fact that 2 in 3 executives are designing post-pandemic policies like RTO with little to no input from workers.

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In 2021, workers left their places of employment in droves due to this disconnect, causing the Great Resignation. But now, with a recession in the offing, the scenario could get more complex.

How the news of recession may impact remote, hybrid, and RTO arrangements

As a result of the Great Resignation, it was possible for top talent to choose their most favourable workplace conditions and gain from a bullish market.

The recession, with its fear of layoffs and job uncertainties, turns this on its head and creates an environment where employers may be poised to push more aggressive RTO policies. Large corporate employees like Uber and Netflix are either scaling back hiring plans or letting go of a certain segment of workers.

Now the question arises if it becomes harder for employees to be essential to a business when they are remote. In that case, workers may feel compelled to comply with a full return to office regardless of their own preferences. Despite performing well in a remote or hybrid arrangement, policies that favour presenteeism in the face of a recession could put an employee’s current position at risk.

In this environment, it becomes crucial for companies to strike the right balance. The optimal policy is one that benefits business outcomes, productivity, and employee wellbeing, instead of only reacting to short-term market conditions.

Striking the right balance and navigating the talent market shifts effectively to maximise both motivation and productivity will rely on active steps from both employers and employees to bridge the gap in human connections at work.

Indeed, not taking feedback or input from workers (which is what so many companies are doing) can lead to RTO policies that drive compliance amid a recession but not engagement, eventually bringing down productivity and output.

The need to empower middle managers with empathy and autonomy

The key to addressing the disconnect and navigating these “rough tides” successfully is to empower middle managers, who are the conduit between an organisation’s decision-makers and workers at the frontline.

Research confirms that managers are not always happy with remote work arrangements and would rather have employees be present, which is not always conducive to productivity. Instead, it is vital that managers are equipped and able to act with empathy, and understanding of employee needs. They should also have the autonomy to make decisions that best fit their unique team dynamics, as well as the organisation as a whole.

This is crucial because different teams in an organisation will have different dynamics, interpersonal relationships, personalities, roles, and drivers of engagement. It is only through constant monitoring, two-way feedback, and tailored education that managers will be able to understand and respond to their team’s requirements.

For example, in a recession scenario, knowledge workers may face a different kind of anxiety while onsite, and frontline workers may face high work pressure and stress. By observing and measuring the right employee sentiment indices, managers will be able to grasp and act on the real need of the hour.

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However, this does not mean that managers should be left to their own devices, without support when it comes to empowering their teams. They need to be equipped and trained with the right tools and resources so that they can engage their teams effectively and compassionately.

This includes people analytics that is tailored for employee experience analysis and manager guidance. It is not sufficient to simply surface the data, personalised action suggestions are necessary to help managers make the right call at the right time.

Currently, there seems to be a gap in this regard. Our research indicates that 42 per cent of HR administrators report that it is difficult to include managers in the decision-making process in a post-pandemic scenario, not due to lack of intention, but due to the absence of resources and preparation.

In addition to adopting the right tools, organisations must complement policies structured in a manner that managers can act with autonomy while being confident about the veracity of their decision.

The way forward

A return to work may be inevitable for some companies, and employees may find themselves having to comply. It is only with the constant communication, transparency, and a demonstration of empathy by managers that it will be possible to maintain trust.

Without engaged and productive employees, companies will find it difficult to navigate a recession period. Optimising for employee experience through manager empowerment should be a top priority for organisations moving forward.

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