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Leading through turbulent times has become all too familiar to leaders; PwC’s new report found that 90% of executives are concerned about macroeconomic conditions, including the Federal Reserve’s tightening cycle, the rising cost of capital and wages that are not keeping up with inflation. However, 82% remain confident in their ability to implement digital transformation initiatives and 77% are confident that they can achieve their near-term growth goals.
Inflation is an imminent threat, but deep budget cuts can create exactly the precarious situation that companies hope to avoid. Rather than act quickly, the survey found that executives are focused on planning for the potential timing and severity of a recession.
Leaders are thinking about how to reduce costs without reducing headcount, such as using automation and managed services for efficiency. CIOs are always considering investing in digital transformation.
Implement strategies to weather the recession
Along with inflation fears, executives worry that wage growth will not keep up with rising costs and plan to cut full-time staff accordingly. In fact, 81% of CHROs plan to implement at least one tactic to reduce their workforce, such as layoffs, voluntary retirements, or not replacing departing people in the event of a hiring freeze.
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The state of hybrid working remains a hot topic among executives. Two-thirds worry about a slower-than-expected return to work. Many are looking to set up 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 promotes participation in the office.
As fears of a recession loom, all hope is not lost. Leaders are focused on growth and looking to enter a healthy recession and come out of it healthier. While aware of their cost structure, this is part of a larger conversation about how they will transform their businesses for the future, rather than a knee-jerk reaction to current economic conditions. The quality and speed with which they are able to execute will determine the outcome.
Effective strategic planning, investments in growth, and continued flexibility will enable businesses to overcome growing concerns.
PwC’s report surveyed more than 650 business leaders, including 91 chief financial officers and 94 chief human resources officers.
Read the full PwC report.
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