Dive Brief:
- Eighty percent of hiring managers think a recession is looming, and nearly half expect it to rear its head within the next year, according to the results of an Express Employment Professionals-Harris Poll survey, released Wednesday.
- In response, 83% of employers said they’ve started preparing by taking proactive steps, with 45% trimming unnecessary expenses, 29% streamlining processes, 26% cross-training workers, 23% leaving vacant roles unfilled and 19% conducting layoffs.
- These efforts, however, have taken companies’ attention away from their strategic goals. Of the 1,000 hiring managers surveyed, 61% said preparing for a potential recession has interfered with their ability to focus on the organization’s long-term future, and more than half said they’ve had to completely overhaul their strategic plans since the start of the year.
Dive Insight:
Nearly all companies said a recession would affect their business, and 60% said it would have a major or moderate impact. However, more than a third doubted their company could survive a recession this year, a percentage that climbed to 57% among blue-collar employers.
If a recession were to occur, 35% of companies said they would cut back on hiring, up from 30% in spring 2022, while 17% said they would freeze hiring.
The number of candidates who reported receiving multiple job offers during their most recent hiring process already dropped in the first quarter of the year, and fewer candidates backed out after accepting a job offer, a Gartner study released in June found. These figures point to a softening labor market, the director of research in the Gartner HR practice said.
Hiring managers responding to Express Employment Professionals-Harris Poll identified a few moves that could help their companies pull through a recession, such as implementing training and upskilling programs, using flexible staffing options and receiving clearer communication from leadership.
“The most resilient companies don’t just react to economic shifts; they use them as catalysts to become more efficient,” Bob Funk Jr., CEO, president and chairman of Express Employment International, said in a news release. “By streamlining operations and investing in versatile talent, businesses can position themselves for long-term success in any environment.”
To that end, more than half of the hiring managers surveyed said a possible recession could be “more of a growth opportunity than a threat,” and more than 3 in 4 expected their company to be in better economic shape by the end of the year.
Organizations also “are being more deliberate about how they allocate pay” and where they focus their investments, a director of rewards data intelligence for WTW recently said. Companies that lowered their salary increase budgets pointed to an expected recession, weaker financials and worries about cost management as reasons, a WTW survey from July found.
