Top Three Threats to Employee Morale in Today’s Economy


Turbulence in the business world can impact a lot more than your bottom line. Sure, some of the effects are measurable in tangible, dollar-value terms – an economic downturn can cause a 10% drop in your team’s headcount, or a specific decrease in revenue as customers churn. But there are also intangible impacts that, though difficult to quantify in numbers, can pose just as much of a threat to your ability to execute at an elite level. 

Chief among these: the impact on employee morale in Today’s Economy.

Here are the top three ways economic uncertainty can cause team morale issues that stand in the way of Flawless Execution.

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1. Tensions between Sales and Marketing come to a head

Most sales teams have at least one “lone wolf” rep. This is the rep who finds little value in marketing-sourced leads and prefers to do their own prospecting instead. And it’s not always just one – sometimes entire teams are comprised of lone wolves. 

This isn’t necessarily a flaw – the lone wolf approach doesn’t work for all teams, but it works for some. But when times are tough in the business world and sales opportunities are harder to come by, reps don’t have the luxury of relying solely on a lone-wolf approach. They need to use every tool in their toolbox – and that means relying on marketing-sourced leads to supplement their pipeline.

The problem? Sales and Marketing often have a tense relationship even in normal times, with disagreements over lead quality, messaging, and more. When economic turbulence turns up the pressure and forces these two teams closer together, tensions can come to a head. The end result is a significant weakening of morale, as what should be a collaborative relationship instead becomes adversarial.

What you can do as a leader:

Get aligned and lead by example: Sales and Marketing leadership must get on the same page and be in regular communication, so they can project a spirit of alliance that can filter down through their teams. 

Create a culture of mutual support: Marketing should be available to produce targeted content and other “airstrikes” to help Sales move marketing-sourced leads through the pipeline. Sales should provide detailed front-line insights into prospects’ pain points and needs, so that Marketing can produce more effective campaigns.

Missed your revenue target? Learn how to protect your team’s morale and turn things around.

2. When teams face cuts, employee morale suffers

It doesn’t take long for early hints of economic trouble to cause budget cuts and layoffs across the business world. This is something we’ve seen quite clearly in 2022. 

But budget cuts don’t just affect your tech stack, and layoffs don’t just affect those who have been let go. Your remaining employees feel the impact of these changes, as well, in the form of weakened employee morale in today’s economy. They’ve seen their resources diminish while their goals have remained unchanged, creating tremendous pressure for them to do more with less. Moreover – and perhaps even worse – they’re feeling the absence of their laid-off coworkers, many of whom they’d formed positive relationships with and had become a source of joy at work.

Learn More: How to Hit Your Revenue Goal with Fewer Resources

What you can do as a leader:

Communicate: Morale issues in these cases often stem from a sense that the task ahead is too big. When cuts leave a team with limited resources, success can feel unattainable. If you can provide your team with a clear, tangible roadmap to success in hard times, you can give them the boost they need to execute in the face of adversity.

Invest in your employees: Layoffs often unintentionally send remaining employees the message that they’re disposable. Do what you can to strengthen camaraderie among your team and ensure your employees feel valued. Make them understand the positive impacts of their efforts, and celebrate individual successes with the whole team.

3. Territory disputes create friction

A sales rep may leave a company – but their territory remains. If economic realities are forcing layoffs on your team, you may soon be looking at swaths of unattended territory, peppered with deals and opportunities that have been left hanging as the reps who were working them have exited. That’s why, when layoffs come to sales teams, territory realignment often follows. 

So what does that realignment look like?

Some leaders will simply expand a remaining rep’s territory to include the vacated region next door. This, however, effectively amounts to a giveaway that the other reps may see as arbitrary – by taking this approach, leaders may accomplish little more than sowing the seeds of resentment across their team.

Other leaders take a more comprehensive approach, and conduct a complete realignment of all territories based on individual reps’ industry expertise, relationships, and other factors. Still, this can result in some reps losing parts of their territory – and the leads and open opportunities that come with it, which those reps have worked hard to pursue – to their teammates. This, too, can cause no small amount of friction. 

Soon enough, your reps feel they’ve been robbed, and the prevailing mood across your team is tainted with distrust and resentment – a potent recipe for poor employee morale.

What you can do as a leader:

Think equity: Take the time to make sure you’re redistributing territory in a way that is as equitable as possible. Your goal should be making sure that each territory is mapped to the rep who is best equipped to work it, while minimizing inequalities in territory size or revenue opportunity. It’s a tough balance to strike, but an essential one.

Compensate when possible: If some reps do, in fact, lose territory, explore ways to make it up to them. Measures could include checking with finance to see if you can temporarily increase those reps’ commission rates, or allowing reps to see any ongoing opportunities through to the finish line before they’re completely removed from a territory.

Afterburner event is a great place to build the team solidarity it takes to overcome employee morale in today’s economy. Get in touch to start your journey to stronger team dynamics and Flawless Execution.