Study: More Skills Needed to Properly Manage Financial Downturn

When the next recession hits, as much as half of today’s workforce won’t be prepared.

This is according to research from VitalSmarts, a leadership training company, which asserts that 89 executives in a recent survey say 47% of their employees are not sufficiently “agile, persistent or self-starting to handle a recession.”

The company asked 1,080 employees and executives to rate their company on five skills thought to be most important to weathering a financial downturn: open dialogue, change mastery, productivity, universal accountability and leadership.

The survey shows 52% believe their employees lacked the skills to engage in open, productive dialogue. On the upside, executives had relatively less concern about their employees’ productivity in a financial downturn.

“As the threat of a recession looms, executives question whether their people have the skills to adapt, candidly speak up and hold others accountable,” says David Maxfield, vice president of research at VitalSmarts. “Unfortunately, our research shows leaders who find their teams and organizations to be on the short side of these skills during a recession may not only struggle to weather the recession well, they may struggle to weather it at all.”

Employees, for their part, say their boss and other leaders also struggled to practice the five skills cited. Specifically, 52% said their bosses did not have the skills needed to successfully navigate a recession, according to the survey, which included 964 employees. Only an average of 7.3% of employees were confident their senior leaders could plan, communicate or lead the sustainable changes needed for success.

Joseph Grenny, co-author with Maxfield of Crucial Conversations, says, “Recession-proof companies have people – from front-line employees to executives – who can hold crucial conversations on how to stay relevant, profitable and accountable. Interestingly, a lot of executives may not be any more prepared than their employees. Employees across the board need to be trained in these skills.”