Straight talk in tough times: Effective employee communication in a troubled economy

February 2, 2009

Copyright © 2009 PRSA. All rights reserved.

By Lisa Ward

The following article appears in the February 2009 issue of PR Tactics.

If you’re concerned about how the economic crisis will affect your business, it’s likely that your employees are concerned too. They’re probably questioning the stability of the organization, wondering what kinds of cutbacks are being considered and calculating where they rank in terms of possible layoffs.

The way that you communicate with your employees during difficult times has a tremendous impact on morale, engagement and productivity. If you leave their questions and concerns unaddressed, employees lose faith. In the absence of information, they fill the vacuum with speculation and rumor that, while usually incorrect, is nonetheless damaging. The result can be a distrustful, disengaged work force that reduces effort and commitment just when you need their dedication the most. How do you stop — or better yet, prevent — this cycle?
The key is to avoid creating the vacuum in the first place. Even in a crisis, good communication keeps employees engaged and the organization moving forward. Kenexa, a company that provides employee recruitment and retention software and services, analyzed organizational and employee engagement data following the 2001 economic downturn. While many of the companies they studied experienced declines in revenue and profit, they found that a number of leaders acted proactively against the poor business climate. These leaders were straightforward about communicating the issues, setting a vision for the future and motivating their workers. Their companies were able to maintain high (or even increase) levels of employee engagement, regardless of the poor economy. 
Keep these tips in mind to make sure you’re communicating effectively and getting the employee enthusiasm you need — in good times and in bad:
  • Be clear. Transparency is always a foundational principle of business. Avoid the temptation to be transparent only when it’s convenient or when the news is good. Some organizations refuse to acknowledge difficult news, thinking that it will discourage employees. This approach can backfire. The resulting rumors and misinformation cause leadership to lose the ability to manage the message. Good or bad, be honest.
  • No news is (not) good news. Consistently practicing timely and open communication will build the trust and confidence necessary to survive difficult times. When you’re developing the message, think about it in terms of a Q-and-A. What’s the issue? What’s the plan to address the situation? What are the anticipated changes and how will they affect the organization and employees? And if there is information you simply can’t share because of legal or shareholder concerns, explain why and promise to follow up as soon as possible. Then follow through.
  • Stay straightforward. Information that is delivered to internal audiences is usually also distributed externally. If there is a disparity between what is being said outside versus inside, credibility plummets. So make sure your messages are honest, authentic and consistent.
  • Manage the medium. Consider the information you need to deliver, then decide what is the best communication vehicle for it. Ideally, bad news should be delivered in person by the most senior executive available. Face-to-face forums are best, and they can be videotaped and posted on the company intranet for remote employees. Follow the face-to-face forum with further information via e-mail or intranet posting, and include a feedback loop so that employees can comment and ask questions. A two-way dialogue encourages employee input, and may even spark ideas to help resolve the situation.

Tough times breed fear and uncertainty. Transparent communication with your employees is necessary to maintain the morale and enthusiasm needed to weather this economic climate.

Lisa Ward leads the health care group and internal communications practice at Capstrat, a Raleigh, N.C.-based communications agency. E-mail:



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