Amid rising interest rates, the geopolitical crisis, countless ministerial sackings and China’s Covid infections hammering global supply chains – it’s no surprise that there’s a feeling of jeopardy in the air for businesses in 2023.
Kristalina Georgieva, the head of the International Monetary Fund (IMF) warned that a third of the global economy will be in recession this year and that there are tougher times ahead – with the UK’s economy predicted to shrink marginally more than other developed economies in 2023.
For many businesses, there could be tough decisions ahead; layoffs, restructuring, budget cuts – all of which can be met with criticism and trigger long-term reputational damage. Stakeholders are likely to be nervous during an economic downturn and investors will be seeking more justification around where their money is going and how it’s being spent.
While corporate PR and communications can’t fix an economic slump, it can insulate a business and brand from the reputational impact of a recession.
During the 2008 recession, many businesses made knee jerk cuts and PR/communications expenditure dropped by 13%. Yet statistics showed 3.5 times more brand visibility for companies and organisations that maintained their output.
With a recession, comes change – and for many, opportunity.
PR can be a key agent of this change, from how businesses communicate internally and externally, to how they react to consumer shifts and societal changes.
For example, during the cost-of-living crisis where sentiment towards big retailers is down, companies had to think carefully about their Christmas adverts and campaigns. The John Lewis advert was highly praised for its sensitive portrayal of children in care, with the overarching message diverting from buying gifts to acts of kindness.
A carefully considered PR strategy should dovetail perfectly with creative campaigns, examining what works best in line with the news agenda, competitor messaging and context, public sentiment but also business targets. John Lewis would never put out a message saying ‘don’t buy gifts’ or that encouraged excessive materialism during a cost of living crisis, but by stripping back the special effects and honing in on purpose – they’re showing sensitivity to the nation and maintaining their positive, trusted reputation amid other flash in the pan trends.
When brands don’t get it right, they can suffer immense reputational damage. Following the pandemic, many businesses suffered closures or had to downsize – in turn meaning many employees were made redundant.
Undeniably, layoffs are never a positive, but how redundancies are communicated internally and externally can make a huge difference. A PR strategy can encompass drafting notices to stakeholders and wider company announcements as well as advising around restructurings.
It’s vital that companies are prepared to explain the factors around ‘right-sizing’ or cuts. This is where a PR strategy is pivotal in preparing a holding statement for when the company is asked for comment and helping to agree on internal messaging.
An economic downturn doesn’t always spell trouble for businesses either. It’s prime time for CEOs and business leaders to create media profiles and become trusted narrators on these issues in the press. It’s a time where the press is hungry for comments on the market, tips for businesses and predictions for the future. During the pandemic we saw more opportunity for our spokespeople than ever before: commenting on policy, national issues, economy and the jobs market when many others shied away from the spotlight. This delivered market share and had a significant impact on building trust for clients including Reed Recruitment and RED Driving School.
Through carving out a distinct profile out in the press, business leaders can ensure they’re gaining recognition and traction even when optimism may be low. In order to deliver a positive incremental impact on stakeholder trust, an effective corporate communications strategy must encompass a range of channels and tactics. Strategies can include (but aren’t limited to) data-driven thought leadership articles published across the press and social media, providing commentary on breaking news stories and organising briefings with key media contacts. Additionally, media training can help business leaders perform at their best when interviewed.
A stormy market is undoubtedly a cause for concern for businesses. However, a positive reputation can be recession proof if managed carefully with a strategy tailored to weather the worst of conditions.