Although economic shifts are inevitable, businesses can take control​ by investing​ in their most valuable asset: their workforce.​ Here's how.

As tariffs and trade policies shift, businesses face significant financial unpredictability and pressure. The 2025 tariffs have led to rising costs, disrupted supply chains, and operational challenges for small businesses 1. A study of publicly traded companies in 2018 found that supply chain disruptions and raw material costs were the two most frequently mentioned concerns related to tariffs 2.

Companies are being forced to make tough decisions and budget cuts that impact employees. The tightening of budget controls in response to crises is positively associated with employees' emotional exhaustion due to increased perceptions of role ambiguity and role conflict 4. This uncertainty isn't just affecting individuals. When employees struggle, it affects the overall health of businesses as a whole. Research shows that after layoffs, companies experienced a 41% decline in job satisfaction, a 36% decline in organizational commitment, and a 20% decline in job performance 5.

Companies that approach these challenges with a balanced focus on financial and employee health and wellbeing will be in the best position to persevere through economic fluctuations. Supporting employees during uncertain times is crucial to maintaining productivity, boosting morale, and long-term success. Studies have shown that companies that shed workers lose the time invested in training them, their networks of relationships, and knowledge about how to get work done 5. Moreover, downsizing a workforce by 1% leads to a 31% increase in voluntary turnover the next year 5.

To mitigate these effects, companies can implement strategies such as open communication, flexible work arrangements, and prioritizing mental health. Providing financial assistance and meal subsidy programs can also help ease employee stress during economic downturns 67. By creating a supportive community and offering individualized support, organizations can build resilience and sustain productivity, leading to a more positive, engaged workplace 67.

The Cost of Uncertainty 

Imagine this: one day employees are thriving with perks and great benefits. The next, those same perks are gone without warning due to budget cuts. What once was a thriving workforce built on trust, engagement, and motivation is now unhappy, leading to more absences, resignations, and frustration. 

In 2023, 47% of companies trimmed overall employee benefits, scaling back on perks like wellness retreats and free food. When companies eliminate benefits and freeze raises, employees feel undervalued, leading to disengagement, decreased productivity, and high turnover. Gallup's research shows that disengaged employees can reduce team productivity by up to 34% (8).

The cost of replacing these employees often outweighs the short-term savings from cutting benefits. According to SHRM, replacing an employee can cost 50% to 200% (9) of their annual salary. After people leave, companies can lose significant productivity and face impacts on morale, customer relationships, and brand equity.

In contrast, maintaining benefits can help maintain employee engagement and productivity. A study found that despite economic concerns, 52% of employers would not reduce benefits, and 58% would not reduce salaries (10). This approach supports long-term success by preserving a motivated and engaged workforce.

A Smarter, Long-Term Strategy

Instead​ оf cutting the budgets that boost morale, businesses should explore alternative strategies that engage employees cost-effectively. Affordable initiatives like wellness programs, financial resources, and mental health support show employees that their wellbeing matters, without breaking the bank for employers. 

AI-driven holistic health and wellbeing programs are becoming increasingly popular for their ability to deliver personalized support to employees. These programs offer real-time guidance across stress management, fitness, and mental health, providing tailored recommendations and resources to meet each employee's unique needs. This approach not only enhances engagement but also ensures that wellbeing initiatives remain scalable and cost-effective.

Benefits of health and wellbeing programs include:

• Lower healthcare costs: Wellness programs help prevent burnout and health issues, leading to lower healthcare expenses for employers and employees alike.
• Higher retention rates: Employees who feel valued are more likely to stay at companies long-term. 
• Enhanced productivity: Engaged employees are more motivated and committed to the success of their work. 
• Stronger resilience: A motivated and supported workforce keeps operations running smoothly, even in times of uncertainty.

• Personalized support: AI-powered wellbeing programs offer tailored solutions for each employee, giving everyone the care they need.

Planning for the Future

Although economic shifts are inevitable, businesses can take control​ by investing​ іn their most valuable asset: their workforce.​ A strong, supported team fosters long-term success. Prioritizing employee wellbeing doesn’t just benefit individuals—​ іt secures a competitive edge with​ an adaptable and prepared workforce for future challenges. Companies that prioritize their employees today will​ be the ones thriving tomorrow.