You've successfully subscribed to Intellect | Resources
Great! Next, complete checkout for full access to Intellect | Resources
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info is updated.
Billing info update failed.

Recovery tips we can take from the 2008 recession

Recovery tips we can take from the 2008 recession

2021 has become a year of hope- A year for the world to heal and rebuild from the aftermath of the pandemic. Economists forecast that, based on current GDP levels, the global economy will be on track to deliver 6.4% GDP growth in this new year.1 While this bodes well for companies and employees that have been waiting for this economic recovery to come, there is one important factor that organisations often neglect when navigating through the aftermath of a recession - employee wellbeing.2

Employee wellbeing is an important factor in an employee's productivity, turnover, and overall job satisfaction with a company.3 Therefore, during an economic downturn, employee wellbeing is often the first thing that a company focuses on. After the economy starts to pick up, however, it often gets overlooked as it is assumed that employee well-being will improve in parallel with the economy.4 While there might be some truth to this, studies have shown that the challenges employees faced during the recession period were associated with lasting negative physical and psychological health consequences long after the economy recovered.5 The post-recession period, therefore is a crucial window during which organisations need to support employees to mitigate the lasting after-effects of the pandemic.

Learning from the past

After the Great Recession in 2008, multiple studies were conducted on employed workers to study the long term effects of a recession on their physical and psychological well being. These studies found that employees who suffered any type of financial, housing-related, or job-related hardship were more likely to show increases in symptoms of depression, stress, and anxiety several years following the official end of the recession.2 These symptoms impacted physical wellbeing and increased the likelihood of cardiovascular, respiratory problems and substance use.4,6

These symptoms were found to also affect an employee's perception of themselves. Self-esteem, self-worth, and the belief in their own capability declined in the years that followed the recession.7 Ages around 18-25 were the hardest hit cohort as a successful transition to independence, adulthood, and career progression was often stunted.7

Figure 1. Long term effects of the 2008 recession on an employee's physical and psychological well being

Looking to the future

Although the COVID-19 recession is unique, due to its public health nature, there are still lessons that can be learned to mitigate and improve an employee's wellbeing. Stress associated with job insecurity was one of the key mechanisms for increasing poor physical and psychological health in employed workers after the recession.6

To address this, companies should maintain transparency when communicating upcoming changes or layoffs. Disclosing the scope of change or duration of the layoffs may help limit the uncertainty and mental health distress that remaining employed workers face.2 Additionally, companies should counter long term physical health decline by promoting and providing increased employee wellbeing support services. This could include telehealth services or targeted and preventative online wellness programs. These services have been on the rise and are adapting well to the new digital forward climate.

2021 is shaping up to be a year of recovery. While companies take this time to celebrate the slow return to normalcy, it’s important not to neglect this crucial window as we move to the post-pandemic period. Our own history gives us valuable lessons to navigate and mitigate the lasting after-effects of the pandemic. Wellbeing support would not only ease an employee’s burdens but could also be a sound financial investment that may act to stimulate faster economic recovery.4

By Sadrish Pradhan