The economic downturn is causing employees and employers alike to reevaluate where they stand in a spiraling economy.
By Zee Johnson
Executives are always closely monitoring issues to ensure their workforce remains productive and profitable. And it’s no surprise that for 2023, the thing they’re keeping the closest eye on is the looming recession.
The Conference Board’s C-Suite Outlook 2023 found that the recession is weighing heavily not just on U.S. leaders but also on leaders abroad. Fifty-one percent of CEOs worldwide (60% of U.S. CEOs) expect a mundane year, and most think the economy will remain stagnant until the end of 2023 or the beginning of 2024.
The survey also found that next to the recession, CEOs are most concerned about inflation, continued COVID-19 disruptions, labor shortages, supply chain issues, and more. And in places like Europe, the war in Ukraine is high on that concerns list, as well as volatility of energy prices. On the not-so-distant horizon, 46% of CEO’s say climate change has already had an impact on their business or will have an impact on their business in the next one to five years.
Towering concerns like a recession open the floor up for leaders to see and discuss how prepared their organizations truly are if faced with crises. In fact, just 36% of CEOs say their organizations are well prepared for the global recession, 39% say they are well prepared for financial instability, 31% say they are well prepared for inflation, and 28% say they are well prepared for supply chain disruptions.
Likewise, employees are also feeling recession pressures and are willing to make necessary sacrifices to protect themselves in case the economy becomes even more volatile.
A recent Yoh survey found that 29% of employed Americans are more likely to seek work outside of their existing job by way of a second job or side hustle to supplement their income. And 88% of employed Americans cited at least one of the following statements when it came to their career plans amidst a potential recession.
- I am willing to work more hours than are required of me without additional compensation (22%).
- I am less likely to actively seek a raise or promotion (12%).
- I am willing to take a pay cut to avoid being laid off (11%).
- I am more willing to overlook my company’s failings because I don’t want to risk losing my job (17%).
- I am more likely to go above and beyond (e.g., take on a new project, improve organizational culture, learn new skills, undergo additional training) to highlight the value I can bring to my company (29%).
- I am not likely to search for a new job until the threat of a recession subsides (15%).
CEOs are preparing for the future, too. Globally, leaders are now looking to contain costs and reduce discretionary spending, and the survey found that few are looking to immediately reduce head counts or cut wages, benefits, or bonuses. Instead, the number one focus area this year will be attracting and retaining talent, followed by driving revenue growth, modifying business models, driving profit growth, accelerating digital transformation, and more.
Rebecca Ray, PhD, Executive Vice President of Human Capital for The Conference Board, thinks that these initiatives are great, but also believes leaders should diver deeper and create a fair and supportive environment during economic uncertainty to get the best results.
“To attract and retain talent—the biggest internal worry of CEOs worldwide—leaders are focused on building stronger cultures,” she says. “But some of the key factors that contribute to such an environment—including addressing pay inequality, development opportunities, and a psychologically safe workplace—are relatively low on their list of priorities. This presents an opportunity for C-suites to revisit their companies’ goals for strengthening organizational culture and the specific actions required to do so.”