Well-designed benefits: a lever for organizational resilience
Organizations facing economic tension and inflation are advised to invest in human capital rather than merely cutting costs to recover from crises.
In the face of economic tension, rising inflation, and escalating costs, many organizations instinctively respond by minimizing expenses, cutting investments, and delaying strategic initiatives. While this reaction might be reasonable, past research indicates that simply reducing investments in human capital is insufficient for recovery. Organizations that invest wisely and maintain a forward-looking vision tend to fare better. A historical example is Franklin D. Roosevelt, who, during a severe economic depression, opted to bolster employment, health, and social security programs instead of dismantling social protection systems, thus easing immediate crisis pressures and fostering resilience.
Roosevelt's strategic choice to enhance rather than diminish social programs during a time of extreme strain serves as a critical lesson for today's organizations. By prioritizing the welfare of their employees and society at large, organizations can build a robust foundation for future growth and resilience. This approach not only mitigates the immediate negative impacts of economic crises but also establishes a more sustainable business model that can adapt to future challenges.
Ultimately, the ability of organizations to navigate periods of crisis lies in their commitment to invest in their human capital and innovate their benefits design. Those who embrace this strategy will likely emerge stronger and more resilient, highlighting the importance of a proactive stance in the face of adversity.