The 5 Employee Groups That Can Make or Break Your Recovery From a Recession
Groundbreaking new research from Great Place To Work® shows that experiences of Key Employees around inclusivity, innovation, fairness and integrity drive exceptional business performance during uncertain economic times like a recession.
4.5m employees have spoken
Great Place To Work analyzed our employee workplace experience data set of more than 1,700 organizations representing roughly 5 million employees over the past 15 years — including the Great Recession of 2007–2009. Many of these organizations are Great Pace to Work-Certified™ companies and Best Workplaces list winners.
What did we find?
There are five groups of employees that can make or break your recovery. We’ll show you how to ensure these Key Employee Groups have a positive experience in critical areas, so that your business is poised to thrive through these turbulent times.
Thriving or Flatlining During the Great Recession
* Our study of the Great Recession considers two entire years of stock performance, from Dec. 2007 to Dec. 2009. The official definition of the Great Recession is from Dec. 2007 to June 2009.
Companies That Did Well During the Great Recession
The S&P 500 suffered a 35.5 percent decline in stock performance from 2007–2009.
A lot of companies lost a lot of value — but they didn’t all share evenly in the pain.
Companies in our study whose Key Employee Groups had very positive experiences posted a remarkable 14.4% gain.
Take a moment to let that sink in: In a recession, these companies saw their performance improve.
For that group of 69 “Thriving” companies, gains started before the downturn and continued well past it as competitors struggled.
From January 3, 2006, to February 1, 2014, the Thriving group saw their stock performance increase 35%, while the S&P 500 had just a 9% gain. These companies didn’t merely outperform the typical business; they blew it out of the water, yielding a gain of roughly 4 times that of the S&P 500.
Companies That Flatlined During the Great Recession
We also found 67 organizations that flatlined during the Great Recession.
These Flatlining companies saw their stock performance decrease 20% between 2006 and 2014.
What could be causing the dramatic difference in performance between Thriving and Flatlining companies?
The Work Experience of Key Employee Groups Unlocks Performance
Key Groups and Critical Experiences
At Thriving companies, five Key Employee Groups were having positive, high-trust experiences around inclusivity, innovation, fairness and integrity. The key groups of employees are women, front-line workers, hourly male workers, long-tenured employees and people of color. 1
The daily work experiences of people in these groups predicted how well organizations fared during the Great Recession.
We also found that particular aspects of the work experience were vital for those Key Employees: feeling treated as a full member of the organization, management following through on promises, fair promotions and feeling welcome when joining new teams. Another critical experience is “Innovation By All” – a sense that everyone in the organization is invited to generate new and better ways of doing things.
5 Key Employee Groups
- Front-line workers
- Hourly male workers
- Long-tenured employees
- People of Color 1
5 critical experiences
- Treated as a full member
- Innovation By All
- Management delivers on promises
- Promotions are fair
- People are welcomed to new teams
1 By people of color, we are referring to people who identify as African American or Black, American Indian or Alaskan Native, Asian, Hispanic/Latinx, Native Hawaiian or other Pacific Islander, or identify with two or more races.
Treated as full member
Innovation By All™
Management delivers on promises
Promotions are fair
New team members welcomed warmly
Why Are These Employees So Important?
- Many serve customers directly, so they’re plugged into the reality of how the business is doing on a daily basis
- Often first to suffer wage cuts, furloughs or layoffs
- Have been disproportionately affected as “essential workers” during the pandemic
- The most historically affected and disadvantaged by issues of sexism, racism, and class
These Key Employee Groups are likely to be the first to feel the pain anytime the business is in trouble. So when their experience is positive, the overall experience of all employees is likely to be positive.
Critical Employee Experiences for Surviving – and Thriving – During a Recession
No matter your level, from frontline manager to CEO, you can help your business move from Flatlining to Thriving by focusing on improving the employee experience in five areas.
Employee Experience Heading into Recession
At Thriving companies during the Great Recession, the Key Employee Groups had positive experiences overall. Those companies also had the smallest gaps in experience between the Key Employee Groups and the rest of their colleagues. Still, troubling gaps have existed.
We studied the experiences of the Key Employee Groups compared to that of their counterparts from 2006 through 2020. We found that Key Employee Groups had 6–11% poorer experiences between 2006 and 2019 across all the critical areas mentioned above.
But there is hope. In data we collected in 2020, prior to the COVID-19 pandemic taking full effect, we noticed a smaller gap in the experience of the Key Employee Groups compared to their counterparts. In other words, many organizations were better positioned to thrive during the COVID-19 recession.
How to Take Action Today
No matter the health of your company’s culture entering a recession, the formula for success today is the same. It involves the five action items mentioned above. And it includes a crucial sixth one: Listen continuously to your people.
Organizations must track the experience of their Key Employee Groups, as part of a wider strategy to monitor their culture.
The organizations that provide the most inclusive, high-trust culture for all their people are the ones most likely to avoid Flatlining during this downturn and beyond.
They are the ones most likely to soar.
Stay informed and respond to the rapidly moving needs of your Key Employee Groups with frequent customized employee surveys.
Understand and close the experience gaps between employee groups with a culture management tool.
Explore company culture advice to help you create an inclusive workplace.