How to Keep Morale Strong During a Recession

As news of an economic recession makes headlines, many employees start to focus less on their work and more on surviving the season. This focus on the country’s woes can increase stress on an already weary workforce and wreak havoc on team morale.

As a leader, you can’t force your team to stay positive, but you have a responsibility to create a culture that nurtures and supports it.

Morale—i.e. the attitude with regard to the tasks at hand—is an essential aspect of a company’s success. It’s a building block to employee engagement. When morale is strong, employees feel enthusiasm, confidence, and loyalty to the organization and their work, which directly translates to team performance. 

When an employee feels overwhelmed, confused, and de-valued, their motivation to excel wanes; weak employee morale results in disengagement and thus affects the bottom line. 

How do you know if morale is slipping? Here are a few red flags of low morale:

  • Increased pessimism about management decisions
  • Increased tardiness and absenteeism
  • A trend of missed deadlines, mistakes, and low-quality work
  • A decline in communication, especially around project details
  • Increased turnover

As the threat of a recession looms, it’s more important than ever to keep morale strong.

By fostering an environment that nurtures and supports strong morale, you can mitigate much of a recession’s impact on your team. Put simply, strong morale helps make your team more resilient in times of uncertainty. A Gallup study of organizations during the Great Recession found that engaged business units or teams outperformed their peers even better during hard economic times.

The evidence shows that strong morale correlates highly with, and drives, performance: 

  • Strong morale provides a competitive edge in good times and bad
  • Strong morale drives the implementation of business strategies
  • Strong morale attracts and retains talented people


Here are some ways you can keep morale strong during a recession:

  1. Lead and communicate with empathy. Don’t forget that personal concerns affect employee morale so make time for quick check-ins about life outside of work.
  2. Over-communicate your mission and vision. Employees need to stay connected to the big picture and know their work matters.
  3. Set clear goals. Leadership needs to prioritize and clarify goals. Managers need to communicate expectations on how to meet these goals.
  4. Keep the focus on doing great work. Employees must stay focused on their strengths, doing high-quality work, not focusing on the economic circumstance.
  5. Encourage innovation. Provide employees time and resources to pitch and execute their ideas.
  6. Celebrate wins. Acknowledge when goals are reached in your staff meetings.
  7. Set boundaries to avoid employee burnout. Don’t reward employees working outside of business hours; encourage the use of vacation time.
  8. Close the gap. Stressful seasons can isolate team members from each other and leadership. Find ways to keep yourself visible and connected to your team.
Strong teams are built by strong leaders. Find out how Ministry Insights’ tools can help you build a team that communicates with empathy, trusts its leader, and executes like never before. Start by taking our Leading From Your Strengths (LFYS) today.