From 'radical transparency' to consistent investment in employees, HR leaders share key strategies to boost morale
When economic anxiety rises, it doesn't just impact markets—it can also impact people and their work.
Ever since the trade war began, Canadians' mental health has seen an increase in fear and anxiety. According to research by GreenShield and Mental Health Research Canada, 42 per cent of Canadians have experienced increased anxiety compared to last year due to current economic conditions.
And with the Bank of Canada predicting a potential recession in the near future, Canadians' mental health and anxiety could worsen further.
So, how can HR leaders help employers keep morale up during times of uncertainty or recession?
“The big one for us at the beginning of all of it is just taking the time to listen very well and to understand,” says Jeff Ostermann, Chief People and Culture Officer at Sweetwater, a music gear company.
While it might be tempting to offer blanket reassurance, Ostermann says one of the main strategies leaders can take to help build morale and ease employees’ fear of uncertainty is listening—and identifying their concerns or anxieties in order to provide support.
“Many times, we'll find that it can be very different depending on the individual,” he says.
Somebody may be worried about their personal financial situation, he explains, so helping them navigate that might mean connecting them to the company's employee assistance program (EAP) for professional financial counselling or psychological counselling.
“We diagnose the concerns accurately and then meet the need with the resource,” he adds.
Danielle Lewis, CHRO at Pacific Pilotage Authority Canada, says “radical transparency” is essential during times of uncertainty.
“As an organization, we're really upfront about financial results, about revenue, and we share information like that at all-employee town halls,” she says.
A study by Mercer conducted from 2023 to 2024 on full-time employees in the U.S. found that when employers openly share business goals, career opportunities, and pay information, employees are the most engaged.
Being honest about any challenges the business is facing, Lewis says, helps build trust between employers and employees.
If you don't have the answers, she believes it’s still best to be upfront.
“I’d be the first one to say, ‘Hey, I'm actually not sure, but when we have a better idea of that, I'll be the first one to tell you,’” she says.
Ostermann agrees but adds that leaders need to make a judgment call about how much they can share—as transparency must be balanced with privacy and confidentiality.
“We may be having [conversations] with industry partners or vendors or things like that, and yes, we're not going to divulge everything to every single individual on the team, because that also doesn't honour the expectation of privacy,” he explains.
Lewis says it’s also important to encourage managers to maintain open communication with employees during uncertain times.
“A lot of times, what we're actually doing is empowering managers to support employees,” she says.
“That more directly impacts their happiness at work, is the trust [employees] have with their manager,” she says.
One of the main things that Sweetwater continues to provide, even in seasons of uncertainty, is consistent investment in employees.
While some companies may pull back training and development to save money, Ostermann says his employer continues to invest, and that helps employees feel less fearful during times like this.
It's important, in times of uncertainty, to maintain consistency in organizational practices rather than backing away, he says.
According to the Corndel 2023 Workplace Training Report, 53 per cent of HR leaders view upskilling employees as the primary method for L&D teams to address recession-related challenges.
Keeping training and development programs gives employees “an added layer of confidence—even if things in the outside world are maybe spinning a little bit, at least they see a level of consistency, Ostermann says.
These L&D programs let employees know they’re still a priority, he adds.
“I was just having a conversation with an employee over lunch today who was remarking back to me how thankful he is that, with some of the challenges out there, we're not cutting back on our employee learning programs.”
Mental health support during uncertain times is critical, Lewis says. Beyond reminding employees about their benefits—which she notes are often underutilized—there’s also value in offering training in professional mental health development.
“I’ve done this at past organizations—advocated for us to support employees and managers going through mental health first aid, so that not just leadership has the tools, but also employees have the tools to support each other," she explains.
Lewis says this kind of training can make a significant impact and help people feel more comfortable discussing mental health in the workplace.
It’s also important, she adds, for employers to reduce barriers to accessing mental health support.
At Pacific Pilotage Authority Canada, employees have access to employee family assistance programs (EFAPs), where they can speak to counsellors directly and use services through mobile apps.
“Making sure that things are as accessible to people as possible is really important,” she says.
Ultimately, for HR and senior leaders to effectively navigate morale during economic downturns, they need to stay grounded in their organization’s values, Ostermann says.
“I believe in times of uncertainty... sometimes the anxiety and fearfulness can cause leaders to be more reactive than proactive and forget some of those things that are at the core... of the organization,” he explains.
That’s why staying aligned with the organization’s mission is essential, he adds.
“There is that foundation of a commitment that we reaffirm to employees: that no matter what's going on in the outside world, we're still here for you. We're not backing away from that. And with transparency, empathy, and honesty, that goes a long way,” he says.
The reality is that businesses are always going to have high and low cycles. And if leaders or employees get wrapped up in that, Ostermann explains, they will be stuck on that roller coaster.
“The steady way to move through that is to focus on what you can control. Focus on your mission. Focus on who you're serving and the good you're doing in the world.”
It is also about reminding employees that although they can't necessarily control their environment, or the situation, they can still influence the attitude they bring to work every day.
“Our fundamental belief is taking care of people and serving them the right way, because it's just the right thing to do,” Ostermann says. “More often than not, that's also then going to result in increased productivity and a benefit to the business.”
