The coffee is cooling on your desk while the headlines scrolling across the news channel are white-hot: “Consumer Confidence Is Plummeting Amid Trade War,” “Manufacturing Industry Is Tanking,” “Business Leaders Expect A Recession Within The Next Six Months.”
The news ticker feeds the butterflies in your stomach. If the recession hits, your company could falter. Who wants to start the workday like that? Stress is never your friend.
Recessions are a natural part of the business cycle. If you haven’t worked through one yet, you will at some point. And given recent headlines, the party might get started sooner rather than later!
But a recession doesn’t automatically mean your company will suffer a slow down, or worse, a contraction. Leave those problems to the broader economy by making your business recession-resistant.
So how do you prepare your company for a recession? Let’s look at some sage advice.
Many economists consider recessions a natural and unavoidable part of the business cycle. Writing for Bain, Tom Holland and Jeff Katzin note:
“It’s overdue. Predicting the onset of a recession is difficult, but a down turn likely will arrive soon, with the current economic expansion now more than ten years old, long by historical standards.”
Holland and Katzin make an even more important point:
“For corporate leaders, however, the exact timing and duration of a recession matters less than being ready to seize the moment early, when they have more options.”
Bain has found that while unprepared companies must react to emerging crises, prepared companies can seize the moment and use a recession as a chance to reinvest in growth. If a recession does set in, your company should approach it as an opportunity.
Some of your competitors will be taking their foot off the gas during a recession. Many companies put off launching new products and making serious investments. Their indecision opens up space in the market for bold players.
Take food and beverage. Back in 2009, amid the “Great Recession”, food and beverage launches declined 30 percent, according to an analysis of Mintel’s Global New Product Database (GNPD). Companies willing to brave the tumultuous markets faced substantially less competition, which impacts the bottom line.
Renowned business Professors Berk Talay, Koen Pauwels, and Steven Seggie found that automobiles launched during moderate recessions enjoyed a better chance of long-term survival.
Is the prospect of a coming recession keeping you up at night? No worries! We got you covered. Here is the first big takeaway: strategy and preparation can turn a recession into an opportunity.
The labor market is the tightest it has been in years. Over at Inc.com, Wanda Thibodeaux argues that “recruiting just ain’t what it used to be.” She cites a survey suggesting that there’s a shortage of skilled labor, and competition among recruiters is fierce.
Finding the right talent can be difficult. When the business cycle does enter a downturn, the labor market should relax, and more talent should be available.
Translation? Opportunity knocks!
Another company’s layoffs could be your gain, allowing you to snatch up top talent.
Even if you have to weather some lean years, you could emerge from the recession in a stronger position, ready to execute while the competition scrambles to keep up. However, a sudden wealth of talent can make it harder to identify the right candidate.
As Carole Oldroyd writes for Pandologic:
“One job ad could garner a multitude of applicants. While that seems like a great problem to have, it can also slow time-to-hire and reduce quality-of-hire, as well. And when quality-of-hire goes down, turnover goes up and so do costs.”
Making the wrong hire during a recession is especially risky. New hires need to hit the ground running. The ROI has to be there right out of the gate.
Here is our second big takeaway: position yourself to reap the rewards of a tight job market. Let’s look at how you should approach packaging during a recession.
How to recession-proof your packaging company?
As the “packaging diva” JoAnn Hines states, you first have to “learn to recognize what buying signals will motivate your customers to purchase your products.”
During recessions, consumers stretch every dollar they spend. Purchasing decisions inspire agony. While it’s always essential for companies to stand out, it’s downright vital during a recession. How so? Agony is a powerful motivator.
Our third big takeaway: added value equals added protection and more sales.
“A customer might skip a fancy dinner,” Hines says, “and pick up easy-to-prepare food at the grocery store instead. So if you’re a food company and can get your packaging right, you could snag a customer from a restaurant.”
Okay, but what about non-food items? If your company’s bread and butter items are luxury items, can you position your products as the quality alternative? Quality made goods stand the test of time. Consumers know this, quality goods last longer.
Americans love vacations, but they’re frequently among the first luxuries cut during a recession. Can you position your products to recreate a vacation at home? Perhaps a massage pad for an aching back or a fire pit for the backyard? Adding a sense of affordable luxury to your packaging could help convince buyers.
Keep in mind; shoppers will want to pay less for more, especially during a recession. If customers are tightening their belt, you need to appeal to their wallets. A potato chip company, for example, could offer 10 percent more chips at the same price.
Recessions are a great time to hone your brand. Even if you have to struggle through some lean years, you could come out with a stronger company when the business cycle turns again, and the economy starts to expand.
Recessions inspire tough questions. How can we be smarter than our top competitors? How can we add value and improve customer service? Is there top talent looking for a new home? The more you invest in seizing the moment, the better you will perform during a recession.
What do recessions have to do with executive recruiting in packaging? Most of the time, not much! But when a recession does hit, you want an executive recruiting firm at your side that sees downturns as opportunities.
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