This report was first published by Mercer .
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Navigating the trifecta of inflation, recession and a tight labor market.
The post-pandemic global economy has brought a new set of challenges for organizations. In response, business leaders are drawing on their experiences of previous crises to prepare their companies for a turbulent 2023. A perfect storm is forming, with a combination of high inflation rates, a looming recession, talent shortages, supply chain disruptions and geopolitical tensions all having a significant impact on both local and global markets.
Executives have difficult choices to make. Should they invest for tomorrow or cut costs today? Should they focus on improving workforce efficiency, health protections and internal talent flows, or should they slash headcount and pull back on wages? Would it make sense to sell off parts of their business to free up capital to help expand their footprint? Or should they increase their strategic partnerships?Ìý
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If a recession is not a barrier to growth, a talent shortage is.
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50%
of executives anticipate they will struggle to meet demand with their current talent model
only 35%
of executives feel confident that they can quickly scale talent needs up and down
57%
of organizations are planning to let staff go, especially those operating in tough competitive environments
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Despite the challenges, there is optimism among executives that customer demand will increase and their companies will weather the storm. The rub is that despite the C-suite believing their talent can adapt, their ability to scale up and down their workforce rapidly lags. What’s clear is that learnings from past recessions and even high inflationary environments are not enough to weather 2023 and thrive. What is needed is a radical rethink of people processes and talent models, and a greater focus on health and productivity if people and businesses are to thrive.
Talent is no longer just an HR topic, it’s a critical business issue – and top of mind for CEOs and CFOs alike.Ìý
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