HR leaders seem optimistic about hiring and retaining workers in the next few months, even as widespread conversations continue about recent layoffs and a potential recession in 2023, according to an April 4 report from The Conference Board.
About 76% of chief human resource officers expect hiring to remain unchanged or increase during the next six months. In addition, 45% expect employee retention to increase, while about 1 in 5 said they believe retention will decrease.
HR leaders also highlighted the importance of strengthening the leadership pipeline and placing a priority on organizational culture.
“While both CEOs and CHROs are concerned about the ability to hire workers, CHROs are acutely aware of the strengths and weaknesses of the workforce, and the challenges of finding and retaining talent,” Rebecca Ray, executive vice president of human capital at The Conference Board, said in a statement.
“Indeed, CHROs know the greater time and effort that is now necessary to successfully hire someone,” she said. “They are also concerned that critical talent, if not developed internally, may be difficult to find in the current labor market.”
As part of its first quarterly CHRO Confidence Index, The Conference Board surveyed 172 CHROs in January and February to gauge their opinions about workforce growth, stability, and stress related to hiring, retention and engagement. Overall, CHRO confidence was at 57, with a score over 50 reflecting more positive than negative responses.
In general, the majority of CHROs said they expect hiring and retention to stay the same or increase. In addition, 45% said employee engagement has increased in the last six months.
CHROs appear to be more optimistic about upcoming quarters than CEOs, as measured by the Q1 Measure of CEO Confidence, which was conducted by The Conference Board and The Business Council. About 42% of CHROs expect hiring to increase, versus 37% of CEOs.
CHROs are also prioritizing the development of leaders at more than two times the rate of CEOs. About 47% of CHROs said they plan to focus on strengthening the leadership pipeline this year, as compared with 20% of CEOs.
Both CHROs and CEOs agreed on the importance of culture and leadership for retention, though CHROs placed a higher priority on these areas. About 34% of CHROs and 18% of CEOs plan to strengthen organizational culture for retention, and 30% of CHROs and 19% of CEOs plan to prioritize the development of workforce capabilities.
Employee engagement, compensation and flexible work arrangements may also help with retention efforts this year, HR leaders previously told HR Dive. Upskilling will also play a major role this year, according to recent research, as well as a focus on retaining contract workers.
At the same time, CEOs appeared to prioritize factors such as innovation, agility and resilience more than CHROs, The Conference Board survey found. About 16% of CEOs highlighted building a more innovative culture, as compared with 4% of CHROs. In addition, 15% of CEOs and 4% of CHROs noted the importance of building agile teams, and 19% of CEOs and 15% of CHROs prioritized building a resilient workforce to prepare for future challenges.
“CEOs are focused on navigating their organizations through a sea of uncertainty and change,” Ray said. “If economic volatility and gray swan events continue to be the norm, organizational agility, resilience and innovation will be key to a thriving business.”