The shock of president Trump’s tariffs—should they remain in place—will without doubt reverberate through workplaces. One of the best things leaders can do for their workers right now is give them calm, consistent communication. Here are points to hit:
You recognize they may feel anxious about the economy and their jobs. Despite low unemployment and recent strong hiring numbers, worker confidence is lower than it was in spring of 2020, according to LinkedIn data. Nearly a third of workers say they’re worried about getting laid off. The latest stock-market dive and increasingly sour economic outlook are further raising anxiety of workers. It’s important to address that head-on. Research consistently shows that—especially in times like these—successful leaders communicate the most.
“Tell them what you know,” advises Peter Cappelli, professor of management at Wharton. “If you don’t tell them what you know, they’re going to make it up, and the stories they make up are always worse than the reality.” Research suggests that sharing scenarios about what’s ahead and what you might do about it—sometimes called “prospection”—is the way to retain and strengthen worker trust. If you don’t anticipate any direct impact on your business from the tariffs but are monitoring any spillover into your client base, for example, it’s worth saying that.
You know this places a financial burden on them. The S&P dropped about 10% in the days after the administration’s announcement. Expectations of inflation have increased significantly, with price increases expected for goods ranging from cars to produce and clothes. Most retirement accounts and 401ks have taken significant hits.
Financial education and support initiatives from employers, such as the one Pepsico offers to its 280,000 employees, are arguably more important in such moments when workers are more strapped, helping them make the best decisions about investing and dealing with any debt, including student loans, that they have.
This may impact decisions about where the company invests and where it pulls back. If you’re transparent about your organization’s financial outlook, it can create a sense of shared ownership that helps workers to understand why you might need to cut some initiatives and to proactively find cost savings.
Providing such transparency allows you to say, “‘Okay, these are the things that we can afford to do…because we’ve polled the employees. These are the things that are important to keep and these are the things that don’t really make sense. We can’t afford it,’” explained Kieran Luke, then chief operating officer of Lunchbox, during a Charter event in 2022.
Under pressure, some organizations might feel the need to suspend employer contributions to 401ks, for example, as a way to preserve jobs—and openly acknowledging the tradeoffs with employees can increase trust. (Layoffs can be tempting in moments of uncertainty, but research doesn’t support the idea that firing staff actually improves the financial or business performances of a company.)
Down markets can be good times for businesses to invest, and the tariff turmoil might create opportunities for your organization as well. The bottom line to communicate is that your business plan could change, and you want your team’s involvement in steering that.
To be sure, Trump could roll back or modify the extreme tariffs, muting any impact. But, for the moment at least, there are no signs he’s ready to do that. And communicating based on what you know is always the best approach.