CEOs are mitigating the risks of the recession by focusing on technology, talent, Environment, Social, and Governance (ESG) to shape progress.
A report released by KPMG titled KPMG 2022 CEO Outlook South African edition: Potential growth in uncertain times reveals that the majority of local executives have already taken steps to boost productivity in preparation for the anticipated recession.
Anticipated recession driving talent freezes
According to the report, the anticipated recession has led to a significant short-term emphasis on hiring freezes and headcount reductions with 36 percent of CEOs in South Africa and 39 percent globally having already implemented a hiring freeze.
In South Africa, 42 percent of CEOs compared to 34 percent of CEOs globally are considering downsizing their workforce over the next six months.
“But when CEOs take a longer-term view, 70 percent [of] CEOs in South Africa and compared to 76 percent globally expect their organisation’s headcount to increase at to 10 percent over the next three years, and CEOs are still investing in their existing workforce, with 72 percent local CEOs compared to 50 percent [of] CEOs globally focused on boosting productivity.”
Hybrid work model
The report notes that hybrid working has had a positive impact on hiring, collaboration and productivity over the past two years. However, many organisations in South Africa are launching return-to-office plans to usher in a ‘return to normal’, and as a result, 76 percent of local CEOs envision in-office as the go-to-office environment in three years’ time, compared to 65 percent globally.
“Employee expectations, when it comes to hybrid work, are evolving, so it’s important for CEOs in South Africa or globally to develop better working structures that suit their people in what is still an emerging area. Even if the supply-demand side of labour shifts in favour of businesses (giving managers more scope to insist on being in office), CEOs across the spectrum in South Africa or globally need to make sure their people have purposeful interactions. How do CEOs define what an optimal structure looks like? Now is the time to experiment and see what works best,” reads the report.
Talent as an operational priority
According to the report, the employee value proposition to attract and retain the necessary talent is tied as the top operational priority to achieving their three-year growth objectives.
“Two-thirds of global CEOs (71 percent) agree the ability to retain talent with the pressures of inflation/rising cost of living are top of mind. A business’s ESG approach is increasingly seen as a differentiator; many mentioned they were seeing significant demand for greater ESG transparency and reporting as the biggest demand was coming from employees and new hires.”