Layoffs not top of mind for CEOs in 2023

The global economy is in dire straits. Inflation has reached forty-year highs in the US, across Europe and in Asia-Pacific, and a recession is looming.

It is no surprise that economic turbulence (64%) and inflation (62%) are top of mind for US CEOs, according to a report by Greenhouse. This is confirmed by EY’s survey of more than 1,000 global CEOs.

Greenhouse’s Winter 2023 CEO Outlook Report.

Greenhouse’s survey of 300 US CEOs found that despite these economic concerns, organizations were largely optimistic about the future.

81% were very or somewhat positive about the economic outlook for the first half of 2023; this rose to 84% for the second half of the year.

Real estate more likely to be cut than jobs

Despite this optimism, Greenhouse asked CEOs what they would cut if their businesses were faced with economic challenges in 2023.

The consensus was that organizations would cut real estate and marketing before wages, benefits or jobs.

Greenhouse’s Winter 2023 CEO Outlook Report.

Only 11% said they expect to reduce their headcount this year, with 19% saying they expect to increase their headcount by a third or more.

44% said they planned to hire as normal, with just 23% considering layoffs and 23% having implemented a hiring freeze.

Proving CEOs commitment to avoid job cuts or hiring freeze is the fact that 76% said they would maintain or increase their hiring teams in 2023.

Only 4% said they would consider reducing the number of recruiters in the team in the event of a recession – instead the focus would be on cautious hiring linked with company performance.

Daniel Chait, Greenhouse CEO, tells UNLEASH: “Often during volatile economic climates, as a cost-saving measure companies will look to layoffs.

“Recruitment departments are frequently one of the first to go, but hiring is not a machine you can simply turn on and off.

“During the pandemic, many CEOs discovered that if they cut recruiting teams to the bones or scrapped their tools during a layoff, they struggled to bounce back when growth reaccelerated.

“That lesson now is evident with almost 30% of leaders planning to allocate their hiring team to other aspects of the business, should a downturn occur.”

Other good news for HR teams is that CEOs aren’t planning to cut spending on HR tech in 2023, despite a looming recession.

41% plan to increase their spend on hiring tech by at least half this year. This is further proof that CEOs now see HR as a strategic, central part of business success.

Ultimately, while the headlines may suggest that layoffs and hiring freezes are widespread, this isn’t quite the reality for all sectors and all companies.

Organizations must not get distracted by the news, and instead when thinking about economic challenges instead focus on the needs of their business and their people when making decisions.

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