As 2022 winds down, the threat of an economic recession is looming. In June of this year, the U.S. inflation rate peaked at a 40-year high of 9.1 percent, and it ended a 12-month period in October at 7.7 percent. And the Federal Reserve has hiked its benchmark short-term interest rate six times over the same one-year period, to a range of 3.75 to 4 percent – with the last four increases being historically large, at three-quarters of a point apiece.

What can you do to ensure that your small business is ready to weather yet another storm – as this potential recession may be the latest blow in the fight to recover following the global pandemic?

Keep a Close Eye on Your Cash Flow

With expenses higher than usual and revenue potentially very tight, the timing of money flowing in and out of your business is especially critical.

• Monitor your cash flow statements daily. Then, forecast realistically based on trailing three, six and 12-month flow charts. This will help you predict exactly when cash will be tight. Create best and worst-case scenario budgets to use in the event of unforeseen ups and downs.

Trim the Fat

Inflation has already driven costs way up – and a recession will only make things worse. Do whatever you can to streamline your business operations and head into the hard times lean.

Identify – and Protect – Your Strongest Revenue Channels.

Now may be the time to adjust your business model, including planning, hiring, and other strategies to focus on whatever will generate the strongest profit margins for your business.

Make Data-Driven Decisions

In every area of your business, including HR, focus on what you can control. What the national and/or global economies do is out of your hands. But, you can know your own numbers inside and out, and make whatever changes necessary to emerge strong once things turn around again.

Consider Optimizing Your ROI with an Outsource Partner

Outsourcing some or all your HR functions can help immensely as you strive to recruit and retain top talent and keep costs under control – in the worst as well as the best of years. The benefits of talent management outsourcing are many – not the least of which is: it frees your valuable time from handling HR duties, so you can focus on keeping your business on track, especially during turbulent times.

Want to See What Might Be Best for Your Organization?

To learn more about outsourcing solutions tailored to your company and its unique needs, contact Key HR today.