PwC report: 81% of executives anticipate a recession in the next six months

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Leading in 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% of them 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 executives were focused on planning for the potential timing and severity of a recession.

Executives 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.

In addition to inflation fears, executives worry that wage growth will keep pace with rising costs and plan to reduce the number of full-time employees accordingly. In fact, 81% of CHROs plan to implement at least one tactic to reduce their workforce, such as layoffs, voluntary retirement, 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 for 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 business for the future, rather than a knee-jerk reaction to current economic conditions. The quality and speed of their execution will determine the result.

Effective strategic planning, investment in growth, and continued flexibility will enable businesses to overcome growing concerns.

The PwC report surveyed more than 650 business leaders, including 91 CFOs and 94 HR directors.

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