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Leading through turbulent times has become far too familiar for leaders; PwC’s new report found 90% of executives are concerned about macroeconomic conditions, including the Federal Reserve’s tightening cycle, higher cost of capital, and wages not keeping up with inflation. However, 82% remain confident about their ability to execute on digital transformation initiatives and 77% are confident they can achieve near-term growth goals.
Inflation is a looming threat, but large budget cuts can formulate the exact precarious situation companies hope to avoid. Rather than acting swiftly, the survey found executives are focused on planning for the potential timing and severity of a recession.
Executives are thinking about how to cut costs without reducing headcount, such as using automation and managed services for efficiency. CIOs still plan to invest in digital transformation.
Implementing strategies for recession-proofing
Along with inflation fears, executives are worried about wage growth not keeping up with rising costs, and plan to reduce the number of full-time employees as a result. In fact, 81% of CHROs plan to implement at least one tactic to reduce their workforce, such as layoffs, voluntary retirement or not replacing people who leave on hiring freezes.
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The state of hybrid work remains a topic among executives. Two-thirds are concerned with a slower-than-expected returns to work. Many seek to implement on-site training, coaching and mentoring opportunities to attract employees. Executives are challenged to rethink the role of the office by creating a culture that fosters in-office participation.
While fears of a recession loom, not all hope is lost. Leaders are focused on growth and looking to enter a possible recession healthy and exit healthier. While conscious of their cost structure, it’s part of a bigger conversation about how they will transform their businesses for the future, rather than a knee-jerk reaction to current economic conditions. How well and how quickly they are able to execute will determine the outcome.
Effective strategic planning, investment in growth and continuous flexibility will see companies through growing concerns.
PwC’s report surveyed more than 650 business executives, including 91 CFOs and 94 CHROs.
Read the full report by PwC.
