Tough decisions may be required, but CEOs can still stave off the negative impacts of a soft market and further distance their organizations from the competition.

Originally published in Chief Executive, May 2023.

As executives make the “hard calls” in response to Q2’s lingering uncertainty, many are doing real harm to their organizations, and often publicly. News stories abound with leaked missteps: from stereotypical remarks about what constitutes ‘best business practice’, to tone-deaf comments following layoffs, to praise for false martyrdom on the part of employees making unenviable sacrifices.

In essence, these leaders are showing disregard for the well-being of their people—a mentality that will inevitably prove costly, fostering inefficient and unpleasant work environments, major declines in engagement, and perceptions that will drive away top talent and/or make recruitment unduly challenging when markets improve.

To avoid this pitfall, leaders must stay focused on the fact that people are essential to the success of any business, even amidst economic uncertainty. That said, they must also channel their people-first philosophies to address areas of highest strategic importance: talent and their engagement, organizational culture and identity, and institutional change agility.

Below are four people-centric strategies executives can deploy to stave off the negative impacts of a soft market and further distance their organizations from the competition.

1. Communicate business decisions and outlook with the utmost care.

Events like layoffs, compensation adjustments, and cost/expense reductions are often unavoidable in a down market. Taking extreme care in communicating such decisions—ensuring a highly professional, intentional, effective, and strategic cascade of information—allows organizations to convey the necessity of such decisions in ways that their people are most likely to understand and accept.

And while it should go without saying that humanity and empathy needs to be the forefront of all such efforts, the spate of unfortunate remarks by CEOs illustrates the importance of reinforcing this point. Even well-intentioned leaders are capable of such gaffes, especially in challenging business times, when fight-or-flight instincts can trigger defensive or otherwise inappropriate comments.

2. Upscale and enhance executives, key leaders and their teams.

Amid soft markets, many companies still have a strategic imperative to invest in their leadership teams’ capability, capacity, and overall alignment. Such investment can help organizations make significant human capital enhancements—for example, optimizing working relationships, freeing up leaders to focus their attention on overlooked or evolving business areas, and simply improving teams’ ability to lead effectively, both now and coming out of the downturn.

Delaying these investments can create an opening for savvy competitors willing to use today’s market as a time to build strength so they can capitalize on opportunities the moment the economy recovers.

3. Onboard and retain new talent with deep intention.

Companies that bring in new people despite the challenging environment must ensure they can deliver immediate value and impact. Achieving this requires leaders to engage in a deep and meaningful level of pre-hire analysis, ensuring candidates have exactly the right profiles for their respective roles. They should also proactively and purposefully help team members acclimate to their new workplace cultures with highly intentional onboarding and integration initiatives.

While it’s tempting for leaders to assume retention strategies are less necessary in a soft market, losing focus on the value of one’s existing talent bench is a mistake. Organizations must continue to clearly articulate employee progression programs and options for advancement, keeping their brand philosophy front-and-center in all decisions and communications.

To magnify the impact of these best practices, leaders should extend them beyond the C-suite, paying close attention to “mission critical” roles at all organizational levels.

4. Ensure culture is designed to accelerate achievement of company goals.

When strategically managed, workplace cultures not only support employer brand perceptions, but also accelerate the delivery of key business outcomes. Unfortunately, too many leaders take their focus off culture during challenging environments, creating a vacuum for norms to take hold that almost never drive big-picture growth and profitability goals.

Taking the time now to review one’s business culture, looking for misalignment between what’s practiced and what’s preached, will best ensure established workplace norms are highly strategic while reflecting organizational values. Leaders wisely embarking on timely cultural initiatives should further understand the overly discussed remote work topic as the red herring it’s become: a distraction that simply spurs debate about where work takes place instead of the truly important issue about why it happens.

When leaders face financial pressure, they often reduce their problems to mere numbers, which makes it easier to avoid what they usually know to be true: business decisions are people decisions with real-world impacts. Ensuring this fact is always top of mind will help companies avoid all-too-common pitfalls and help them optimize the human capital elements of their organizations in anticipation of more optimistic times.

Read this article as it originally appeared in Chief Executive here.

Dr. Matt Brubaker is CEO of human capital advisory firm FMG Leading. An expert in sustainable transformation, his client work focuses on enterprise-wide change initiatives, C-Level development and building high-performing, strategically-aligned executive teams. He serves as an Operating Partner at WindRose Health Investors, a New York-based private equity firm, and also sits on the boards of JM Search, Traditions Behavioral Health, and Big Sky Bravery.