What recession?
A new survey by PwC released Thursday finds that business leaders say hackers pose a bigger threat than inflation or recession, listing growth as their biggest priority even while at least half say they are planning or implementing layoffs or hiring freezes.
The survey of 722 U.S. executives found that just 30% said a recession poses a serious risk to their company, and 83% said they’re focusing their business strategy on growth, despite the growing threat of economic headwinds.
Yet the percentage of executives who are taking steps to rein in or limit the size of their workforces is much larger than those with serious recession risk concerns, the survey found. Fifty percent of respondents were reducing or planned to cut headcount, while 44% said they were rescinding job offers, or planning to do so.
The gap between those numbers are another sign of the confusing split-screen labor market many job seekers and managers are experiencing, as reports of layoffs mount while government data reveals high numbers of job openings and a return to pre-pandemic unemployment rates.
While some firms over-expanded in recent years, or may have gone on panic hiring sprees amid the Great Resignation, many are still struggling to attract and retain people with the quickly shifting specialized skills that are needed as technology moves at warp speed.
It’s all part of what Bhushan Sethi, PwC’s joint global leader for people and organizations, calls the “labor market paradox” his business clients are struggling with. “It’s a dichotomy,” he says. Many companies are going through a shift in their overall workforce mix, meaning “firms are playing offense and defense” when it comes to their talent strategy.
The results are striking for how they reveal efforts by top executives to both hold on to specialized talent while taking precautions to scale back—all at the same time. Some 70% said they were expanding permanent remote work options in roles where it’s feasible, an arrangement that’s in high demand from workers following more than two years of work from home flexibility. Meanwhile, 64% are increasing compensation for employees and 62% are expanding mental health benefits.
Yet executives responded to other questions about pulling back or scaling up in almost equal numbers. For instance, an equal percentage of executives (52%) said they were considering an acquisition just to gain access to needed talent as said they were planning to institute hiring freezes. And while 49% said they were encouraging employees who’d recently left their companies to rejoin—in an apparent plea to fill talent shortages—nearly the same percentage (46%) said they were lowering or dropping sign-on bonuses in bids to attract new hires.
The results come as reports of layoffs or threats of job cuts grow across industries, from venture-backed tech startups to corporate giants like Walmart and Ford, all whilepayroll figures for July defied fears of a recession and easily topped expectations, returning the unemployment rate to pre-pandemic levels.
So if the economy isn’t at the top of the list, what are executives’ biggest concerns? While talent acquisition and retention are still seen as a series risk—38% of respondents listed it as posing a risk—others loom similarly large. Forty percent said frequent and broader cyber attacks amid the war in Ukraine were a serious risk, the most common answer.
Meanwhile, 34% named rising product costs and supply chain disruptions as major risks, and 31% cited the current regulatory environment or inflation. Recession fell to seventh place, just above issues like tax policy changes, U.S.-China relations and Covid-19.
By Jena McGregor, Forbes Staff