While many leaders see a global recession as likely or already here, it is more the conundrum of what to do with the workforce in such a macro environment that presents the biggest challenge in 2023 and beyond, according to Mercer's "2023 Executive Outlook Study."
The dilemma of whether to reduce head count today or invest for tomorrow is a constant, the report said, as C-suite executives deal with the reality of global supply chain, labor and inflationary pressures.
And while the majority of the more than 400 executives surveyed said they are planning for a reduction in their workforce, they are also looking for other ways to recruit and retain the most talented staff. For example, 63 percent of respondents said they can pivot talent from one area to another within their organizations.
Innovation must also drive workforce decisions, the report said, with such an ethos coming from the top and filtering through a whole organization.
"The sobering realization is that without a radical rethink of talent models, talent — not the global economy — will be the dampening impact in 2023," the report said.
While recruiting the best talent is key, it is also vital to retain such talent, and that can be ensured by business leaders and managers continuing to be aware of the impact that poor physical, mental and financial health of employees can have on organizational performance, according to the report.
That said, one-third of respondents said they plan to reduce well-being programs in their organizations in a deepening recession to cut costs.
It will be the more savvy leaders and organizations who can balance the need to cut costs in a difficult environment while maintaining a satisfied workforce for both the short and longer term that will likely win out, Mercer concluded.
"The pandemic provided strong evidence that savvy businesses can survive and grow, even in the darkest of times, by investing, innovating and looking after their people," according to the report.