News during the past month concerning bank failures, government bailouts, and global stock market lows have been accompanied by talk of troubles at individual companies across multiple industries. The constant barrage of negative news has left a pall over the entire business community.
According to a recent study by Weber Shandwick, 70% of the 514 employed Americans surveyed expect the current situation to have a negative impact on the companies for whom they work, 54% said their company leaders have not discussed the impact of the financial turmoil, and three-quarters said their colleagues are discussing it.
“There's so much uncertainty that being able to separate one's company from the economy as a whole becomes that much more important,” says Micho Spring, chair of the corporate practice at WS. “In this climate of potential layoffs and stock prices falling, it's important that if employees can't understand the world at large, then [they should]... understand the fundamentals of their company.”
This free flow of information, coupled with the recessionary economy, has thrust many companies into a crisis communications situation. However, unlike a crisis that impacts an individual company with a specific issue, this is a “global malaise” that requires a different approach, says Mark Hass, CEO of MS&L.
“Even those [companies] that are doing well need to talk about what this means and what matters to employees,” he adds.
As talk of recession mounts, employees are concerned about the fate of their companies. This concern has made internal communications a more important part of the work that firms are doing on behalf of their clients.
Keith Burton, president of Insidedge, says he's seeing an uptick in employee communications, with many clients making sure they understand the company's plans. Moreover, the communications are personal in nature.
“A good part of what they're doing is intensifying face-to-face communications,” Burton says. “Smaller group sessions where people can talk about addressing issues or needs and provid[e] feedback is the most important thing that organizations can do today. Digital media [such as an intranet] is secondary or complementary to face-to-face communications.”
In the case of a public company, Reg-FD requires disclosure of material information that could inform employees about their futures.
“If [companies] anticipate cutbacks... they have to report that in advance,” Burton says. “Employees are pretty vigilant about this, particularly those represented by unions.”
Without direct communications from the company, employees will turn to one another. This type of situation is a breeding ground for innuendo, fear, and misinformation.
While many companies have already started talking about corporate strategies and if jobs will be affected, there's also the chance to talk about other things employees care about.
“If you look at what consumers value in a company – and employees are consumers – this issue of core values is important,” Hass says. “It's a good time for great companies to say they're great companies,” especially as we move into a new year with a new presidential administration and a continuing financial crisis.
This uncertainty can make it hard for senior executives to face their employees. Hill & Knowlton recently launched its global corporate response group to help senior executives with the issues arising from this economic turmoil, among them, employee communications.
“If you're the CEO of a company that's headed into uncertain economic territory, you may not know what it is you're going to have to do because you may not understand the impact this financial situation will have on your company,” says Sallie Gaines, SVP at H&K's global response group. “But you need to do the hard task of communicating with [employees] now, even if you're not sure what the shakeout is going to be. There's no shortage of good data... when there's a vacuum of information, rumor and speculation fill that vacuum.”