Worries about the labor market can become daily stressors for employees in times of economic upheaval or uncertainty. International trade wars and political instabilities can have a psychological impact even for employees who have not yet been directly affected. Unemployment has recently ticked up a little bit as the labor force has contracted and the participation rate dips to its lowest level in almost three years.
Employee concerns today are likely to span everything from job security to inflation, company performance, and even the possibility of layoffs. The combination of these fears can contribute to an overall climate of anxiety that hinders productivity and employee satisfaction. High levels of anxiety across your workforce are likely to show up in quantifiable engagement metrics like absenteeism, grievances, and turnover.
As HR professionals, it’s not within your power to fix the economy, but you can at least create a stronger sense of stability, transparency, and fairness inside your organization. These supports are what employees are really looking for in turbulent times. When people know what to expect and understand how decisions are made — or when they have access to trusted support systems that can help them process these things — they’re far less likely to assume the worst.
Here are five practical strategies HR teams can use to reduce labor market anxiety and build trust with employees:
1. Communicate Like the Business Depends On It
Because it does. Anxiety fills the void wherever you leave gaps in the information your employees are asking for. “Fear of the unknown” is a relatable human feeling that can also be phrased as “intolerance of uncertainty” (IU). High levels of this common condition are linked to anxiety and avoidance behaviors. In one study, 37% of participants chose to take a financial hit to avoid anxious waiting in an uncertain situation
Regular communication, even when there’s no major news to share, can help keep anxiety in check. Employees want to understand how their company is weathering the current labor market conditions and what that means for their roles.
Host quarterly town halls. Schedule department-level Q&As. Ask managers to be upfront with their teams about changing priorities or milestones. Clear, consistent communication is one of the most powerful tools you have to retain top talent in a tight labor market.
2. Prioritize Transparency in Case Handling
A black box response when an employee files a complaint, concern, or grievance can only make the situation worse. If someone’s unsure whether their issue is being reviewed (or if it was ever documented in the first place), that sense of institutional trust begins to break down.
It helps to have a strong HR case management system on hand to navigate procedures and provide structure and verifiable timelines. These things give employees a more transparent way to understand the steps being taken. At a time when employees already feel vulnerable, clear procedures around grievance and issue handling offer meaningful reassurance.
3. Reintroduce Underused Mental Health and Financial Support Tools
Economic stress directly impacts mental health. According to SHRM’s April 2025 labor market survey, nearly half of U.S. workers say the state of the economy has negatively affected their mental well-being. But many employees either forget or underutilize the benefits that can help them cope.
Re-share those resources. Make them visible again. It might be your EAP, your financial planning tools, or legal guidance for family challenges. Reactivate awareness campaigns in high-stress periods to remind employees that they’re not alone and your company has their back.
4. Track Workplace Issues So They Don’t Spiral
Anxiety in the labor market impacts mental health in ways that can show up in daily workplace friction. Managers may see a rise in interpersonal conflicts, dips in performance, or new grievances filed. If you don’t have a systematic way to track these issues, it’s hard to see what’s happening in time to address it.
Digital labor relations tools like a case management platform are a great support for HR teams who want to capture those early indicators and proactively intervene. You don’t need to promise job security to show employees you’re paying attention. You just need to show them that someone is tracking what matters.
5. Normalize the Conversation Around Market Anxiety
HR can also play a role in helping teams talk about what’s going on without fear of judgment or retaliation. Coach managers to check in more frequently and make space for employees to express what’s on their minds. Document trends in feedback that might reflect broader concerns.
Even with a great culture, anxiety can linger in silence. Employees are more likely to speak up early when HR takes the lead in creating outlets and listening actively (before concerns turn into burnout and resignations).
Structure Creates Stability. LaborSoft Helps You Provide It.
What employees want most in times of labor market uncertainty is a sense of stability and support. The cloud-based LaborSoft case management platform gives your HR and Employee Relations teams the tools to get there.
Your team can leverage features for digital HR case tracking, secure documentation, real-time alerts, and built-in visibility, and more to offer a more structured and transparent experience. A responsive team eases short-term anxiety and builds long-term trust. Book a LaborSoft demo today to learn how our platform can help your organization respond more effectively to employees with market anxieties.
