In a “new era of uncertainty,” company boards are increasingly focused on talent issues — notably, retention and cost-reductions that avoid broad-based layoffs, according to a Jan. 13 report from EY.
Economic conditions topped the list of board priorities for 2023, but innovation and the talent agenda were within the top five, beating cybersecurity concerns, regulatory developments and environmental stewardship.
“However, this may reflect the work boards have already done to enhance their oversight in these areas,” EY said. “Respondents may have also concentrated on what they view as more immediate focus areas for the next 12 months.”
Labor, in particular, may require a more hands-on approach due to ongoing concerns about labor cost. Many of the U.S.’s big tech companies, including Google, Microsoft, Amazon and Meta, have cut jobs in preparation for a tough 2023.
EY’s report, however, notes that while strategic layoffs are certainly on the table, employers and boards are instead paying more attention to the long-term talent agenda, which includes keeping and training employees to offset higher labor costs. Executives also noted they currently favor hiring freezes, natural attrition and furloughs as alternatives to mass layoffs.
Other studies corroborate this finding. An MIT Technology Review report released in September noted that organizations may need to focus on retention over hiring to abate recruiting costs, while other reports have highlighted “labor hoarding” as a strategy some employers are using to avoid the talent acquisition problems that sprung up after the Great Recession in 2008.