With job losses spreading, energy shocks building, and food inflation looming, HR leaders need a people strategy built before the pressure arrives. Here's the playbook.
I sat down with Davis recently.
He's our VP of Operations.
The kind of guy who doesn't panic, doesn't overreact, and doesn't speak unless he's done the homework.
So when he looked at me and said...
"Shelley, the workforce is about to feel this in ways most leaders aren't ready for."
I put down my coffee and listened.
Here's what he's seeing.
February came in with a loss of 92,000 jobs.
The expectation was a gain of 50–60k. Unemployment ticked up to 4.4%.
And when you look back at prior months, they were revised down too.
This wasn't a surprise that came out of nowhere.
The slowdown has been quietly brewing for a while. We just weren't paying attention.
Davis's take.
"This isn't a collapse. But it's a crack. And cracks get bigger when pressure is applied."
The labor market has softened from the tight sub-4% unemployment we saw in 2023 and 2024.
Job losses are spreading across manufacturing, construction, transportation, warehousing, and even healthcare.
The sectors that typically hold steady in a slowdown are starting to give.
That's the foundation we're standing on right now.
And into that foundation, the pressure just got applied.
A lot of people are watching the news about the Middle East and thinking, "That's an oil story. That's not my story."
Davis would tell you it's everybody's story.
Here's the reality in plain terms.
The Strait of Hormuz is a narrow waterway between Iran and Oman.
About 20% of the world's oil passes through it. So does a massive volume of liquefied natural gas.
And roughly one-third of globally traded fertilizer.
Right now, that strait is effectively closed.
Not because of a physical blockade but because the insurance market has collapsed around it.
After multiple tanker attacks and explicit Iranian threats targeting commercial ships, underwriters have either cancelled war-risk coverage entirely or repriced it so dramatically that many shipping companies can't operate.
Some insurers aren't even issuing quotes.
The numbers are staggering.
War-risk premiums have spiked over 1,000% compared to just the prior week in some cases.
A large tanker is looking at roughly $1 million in additional costs per voyage.
Hundreds of ships are stranded or rerouting around the Cape of Good Hope, adding weeks of transit time and significant fuel costs.
And then there's the second chokepoint.
The Red Sea and Suez corridor which had already been compromised by ongoing attacks is still being avoided by much of the shipping industry.
So you now have two of the world's most critical maritime passages either shut down or severely disrupted at the same time.
Davis said it plainly.
"When you take out both major arteries simultaneously, you're not just raising energy prices. You're slowing down the movement of goods across the entire global economy."
If the disruption in the Hormuz lasts beyond 30 days, analysts are modeling oil in the $100–200 range.
That's the kind of energy shock that has historically pushed importing economies into recession territory.
But the oil price is only part of the story.
This part of the conversation stopped me cold.
A third of globally traded fertilizer moves through the Hormuz.
Nitrogen fertilizer in particular - described by analysts as the most acute upstream threat to food production - is caught in the middle of this.
Here's what that means practically.
Reduced nitrogen supply today equals lower agricultural yields months from now.
Lower yields mean higher food costs.
Higher food costs mean persistent food inflation, layered directly on top of the energy spike.
This isn't a Wall Street problem.
This is a kitchen table problem.
And it will hit your employees, especially your lower and middle earners, before it ever shows up in your business metrics. I
I've written about economic shifts and what they mean for retention before, but the convergence happening now is unprecedented.
Davis: "Most leaders are going to be caught off guard when employees start asking for cost-of-living adjustments and they haven't connected the dots yet on why."
This is where Davis got specific and direct.
In a recessionary environment triggered by energy and food shocks, U.S. HR leaders will feel the impact across three areas: workforce demand, operating costs, and employee wellbeing.
And the leaders who navigate it well won't be the ones who react the fastest.
They'll be the ones who built their people strategy before the pressure arrived.
Here's the playbook Davis laid out, and what I'd add to it.
CFOs are already thinking in scenarios. HR needs to be ahead of them, not behind them.
Define right now what happens at a 10%, 20%, 30% revenue drop.
Which roles are protected? Which investments - technology, digital capability, supply chain resilience - stay sacred even in a downturn?
Which functions can absorb a reduction without damaging critical capability?
If you don't have those answers before the emergency meeting happens, you'll be making decisions under pressure that you'll spend years recovering from.
Align your playbook with finance and operations now. Not after.
A disrupted economy doesn't reward organizations that simply have the most people.
It rewards organizations that have the right people in the right seats, and know it.
In this environment, supply chain, procurement, pricing analytics, and automation talent become your most strategically valuable employees.
These are your shock absorbers.
The people who can re-architect systems, protect margins, and find solutions when the external environment is working against you.
Know who those people are before someone else recruits them.
Know what keeps them. Build retention strategies around their specific behavioral drivers.
Not generic recognition programs that miss the mark.
I want to be direct about something here: tools like the Predictive Index aren't just for hiring.
And in a volatile economy, using them only for hiring is leaving their most powerful value on the table.
In a downturn, the best HR leaders I know are using PI to make fewer, smarter people decisions instead of reactive, pressure-driven ones.
Here's what that looks like in practice:
Redeployment over reflex layoffs. Before you let someone go, do you actually know whether their behavioral profile fits a different critical role that just opened up?
PI tells you who can flex, who can move from expansion sales into key-account retention, or from routine operations into exception-handling when the supply chain starts throwing curveballs.
Cognitive data helps you avoid the costly mistake of placing someone in a newly complex role they're not equipped to navigate.
Building crisis-capable teams. Under normal conditions, a team can survive a mismatch in behavioral styles. Under stress, it can't.
PI lets you re-map your most critical teams - supply chain, ops, procurement, customer care, and make sure you have the right blend of action-oriented versus methodical, big-picture versus detail-focused, independent versus collaborative.
Adjust the structure before the friction becomes a crisis.
Smarter leadership decisions. In a downturn, every promotion and every leadership replacement carries more weight.
Using PI data to validate those decisions — to confirm the behavioral profile matches what the current business reality needs, not just what worked in growth mode — can mean the difference between stabilizing and spiraling. What got you here may not get you through this.
The visionary expansion leader may not be the right fit for disciplined execution and cost control.
Targeted retention of mission-critical talent. Combine performance data, skills scarcity, and PI behavioral profiles to pinpoint the roles where losing even one person would be genuinely disruptive.
Then build retention strategies that speak to how those individuals are wired — because some people need autonomy to stay engaged, others need security and structure, and others need recognition and visibility.
Generic retention doesn't work in a tight environment. Personalized retention does.
Davis put it this way.
"The organizations that come out of this intact aren't the ones that cut the most. They're the ones that knew their people well enough to make the right calls."
Energy and food inflation will hit your employees' real incomes, and it will hit the lower pay bands hardest.
That creates pressure for cost-of-living adjustments, targeted stipends, or compensation reviews that most organizations aren't planning for.
It also creates conditions for more union activity, more organizing, and harder collective bargaining - particularly in logistics, food, healthcare, and public sector roles.
HR needs to get ahead of this.
Not with a reactive response in six months, but with a proactive framework now.
What's your policy on COLA adjustments? What's your threshold for triggering a compensation review?
What's your communication plan when employees start asking questions your managers aren't prepared to answer?
Davis said something in our conversation that I keep coming back to.
"When leaders go quiet, employees fill the silence with fear."
In a volatile environment, communication isn't a soft skill. It's a strategic function.
Weekly or biweekly updates that honestly connect what's happening in the world to what it means for your business and your people.
That builds the kind of trust that holds organizations together when everything else is uncertain.
Train your managers in difficult conversations.
Budget constraints. Stalled promotions. Restructuring. Wellbeing check-ins.
These conversations are coming whether you prepare for them or not.
The question is whether your managers are equipped to lead them with honesty and care, or whether they default to avoidance, which is the fastest way to lose the trust you'll need to survive this.
Here's the thing about culture that most leaders don't realize until it's too late: it doesn't break in a crisis.
It breaks in the six months before the crisis - when no one was paying attention.
When resources get tight, culture quietly erodes.
Collaboration becomes competition. Communication becomes CYA.
Trust becomes transactional.
And by the time the metrics reflect it, you're already in the hole.
Make your principles explicit right now. Cut overhead before you cut people.
Share the pain from the top. No surprises.
Reward cross-training, problem-solving, and the people who tell you what you need to hear.
Not just what you want to hear.
The organizations that come out of disruption with their culture intact aren't lucky.
They're intentional.
We are not in a recession today.
But we are in a vulnerable labor market, heading into a compounding global shock.
An energy crisis, a food crisis, and a logistics crisis all arriving at the same time, on top of a jobs report that was already telling us something was changing.
Davis doesn't say things to be dramatic.
He says things because the data is pointing somewhere, and he thinks leaders deserve to know where.
The leaders who build their people strategy around this reality right now...
Who use the tools available to them, who communicate with honesty, who know their people well enough to make the right calls under pressure - will be the ones who come out of this with their culture, their capability, and their talent intact.
The ones who wait will be playing catch-up in the worst possible conditions.
What are you doing right now to recession-proof your people strategy?
I'd genuinely love to know.
Build a recession playbook before anyone asks for it. Define what happens at 10%, 20%, and 30% revenue drops - which roles are protected, which investments stay sacred, and which functions can absorb reduction. Shift from thinking headcount to thinking capability, and align with finance and operations now rather than after the emergency meeting.
In a downturn, PI enables redeployment over reflex layoffs by identifying who can flex into different critical roles, building crisis-capable teams with the right behavioral blend, validating leadership decisions against current business needs rather than growth-mode assumptions, and targeted retention of mission-critical talent through personalized strategies matched to individual behavioral drivers.
Culture doesn't break during a crisis - it breaks in the six months before when no one was paying attention. When resources tighten, collaboration becomes competition, communication becomes CYA, and trust becomes transactional. Organizations that emerge with culture intact are intentional about making their principles explicit before the pressure arrives.
Explore articles, case studies, and resources - crafted to keep you ahead.
