How to Empower Your Finance Teams During a Recession

Few words strike terror into the hearts of finance teams the way “recession” does.

Without proper preparation before, and good management during a recession, the impact can be brutal, both for organizations as a whole, and the employees working for them.

We’re going to take a look at five key ways in which you can support your employees, (particularly your finance teams), during a recession, helping to ensure their continued productivity and wellbeing.

How a recession affects employees

A recession can affect employees in a variety of ways.

Times of financial hardship mean that consumers are spending less, so demand for goods and services decreases. Making and selling fewer products, and providing fewer services, often means that businesses will require fewer employees.

As a recession looms, many employees feel stress and anxiety that their job may be at risk. Even with job security, a recession can lead to a reduction in hours worked and can see wages stagnate.

This means that employees are likely to feel the effects of a recession outside of work too. They may find themselves with less disposable income and may struggle to pay bills or purchase goods as prices increase.

How to support your finance team during a recession

A recession can be tough for everybody, regardless of their position in the company. Those working in finance teams will often bear the brunt during these difficult periods and so may require additional support.

Here are some of the most effective ways that you can support your finance team during a recession:

Strengthen communication and collaboration

A quick look at where businesses are increasing software spending will tell you how valued communication and collaboration are in the workplace.

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This is of little surprise; strengthening communication and collaboration across the entire organization will help you to combat the negative effects of a recession.

The number of businesses employing remote workers has seen a marked increase in recent years, and this number can see additional growth during times of economic strife as businesses attempt to lower operational costs.

Given some of the difficulties of remote work, it’s important to break down organizational silos wherever possible. Especially, as they can hinder collaboration and productivity. Tools and technologies such as business messaging apps and project management software can help achieve this.

Enhance financial analysis and forecasting

Improving the way in which you perform financial analysis and forecasting will help you to make well-informed decisions that give you the best chance of protecting the business, and your finance teams, through times of economic uncertainty.

This is where tools like financial modeling and ERP accounting software can be invaluable. These tools are crucial to making sure that you have up-to-date data and that you take a holistic approach to your business's data. Many of these tools also benefit from AI or machine learning, so you have access to informed and evolving financial forecasts.

This means your finance teams can feel confident that the predictions they’re making are as good as they can be, providing some assurance in a time of potential  uncertainty.

Streamline processes and automate tasks

Providing your employees with the tools they need to streamline workflows and automate processes is essential in building a flexible, scalable finance team. There are a variety of SaaS tools and cloud-based platforms that can help you to achieve this.

Automation of processes can be achieved through the use of reconciliation software. This tool makes it quick and easy to compare the financial records of your business against transactions on your business bank statements and check that they match.

Automating a task like this is an easy way to save your finance teams a great deal of time and effort while simultaneously improving accuracy by limiting the risk of human error, and making it easier to spot potentially fraudulent activity.

Encourage professional development opportunities

A non-hierarchical team structure can hold benefits for your finance department, such as increasing transparency, trust, and autonomy among your employees. However, there are benefits to providing your team members with development opportunities, and empowering them to take them.

Upskilling and reskilling programs, which offer employees the chance to learn new skills, can increase motivation and productivity, improve company reputation, and boost retention.

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They give employees access to additional skills and knowledge that will not only help them move up the ranks within your company, but will also help them to achieve greater success in their current role.

Empower decision-making and risk management

When times are tough, it’s imperative that your finance teams are equipped with the information they need to make well-informed business decisions.

The more historical data that your finance team can analyze, the more accurate their predictions will be about future trends, and potential effects of a recession. Once they can make these predictions, they’ll be in a good place to take the appropriate steps to manage the risks your business may face.

Support employee wellbeing

Keeping your finance team happy and healthy is especially important during a recession, when the looming threat of economic hardship can cause a great deal of stress. In fact, financial pressure is reported as the most common cause of stress outside of work.