'While it may be tempting for leaders to 'slash and burn,' they do so at their own peril'
Nine in 10 Canadian CEOs believe that there will be a recession in the next 12 months.
But a majority expect it to be “mild and short”, lasting three to six months, according to KMPG.
And two-thirds of small and medium-sized businesses (SMBs) also expect a recession, with 52 per cent expecting it to be mild and short.
Read more: 2 in 5 workers believe recession is already here
Still, business leaders are adjusting staffing programs to prepare for recession by doing the following:
|
Actions |
CEOs |
SMB leaders |
|---|---|---|
|
Implementing a hiring freeze to prepare for a potential recession |
41 per cent |
30 per cent |
|
Planning to implement a hiring freeze in the next six months |
43 per cent |
40 per cent |
|
Downsizing their employee base |
41 per cent |
29 per cent |
|
Considering downsizing their employee base in next six months |
49 per cent |
41 per cent |
|
Pausing their digital transformation journey |
37 per cent |
25 per cent |
|
Planning to pause digital transformation journey over next six months |
33 per cent |
35 per cent |
"While it may be tempting for some leaders to 'slash and burn' to manage through a recession, they ultimately do so at their own peril," says Stephanie Terrill, partner and business unit leader for management consulting at KPMG in Canada.
"They are counting on both their customers and talent to be waiting for them on the other side of a recession that may never happen."
Hiring plans in next 3 years
Despite this, 79 per cent of Canadian CEOs are confident in their own resiliency to weather a potential recession. Nearly all (96 per cent) of Canadian CEOs and 88 per cent of SMB leaders are also either "very confident" or "confident" in their three-year growth prospects.
And over the next three years, 89 per cent of Canadian CEOs expect to increase their headcount, according to the report based on two surveys: one of 503 SMBs, conducted between Aug. 16 and Sept. 1, 2022, and one of 1,325 international CEOs in 11 countries, including 75 in Canada, conducted in July and August.
Eight in 10 (77 per cent) SMB leaders also expect to increase their headcount over the next three years, of which 20 per cent expect an increase of at least 11 per cent in their workforce.
Read more: How to handle tough discussions around layoffs or wage cuts
However, hiring has not been easy for many SMB leaders. Two-thirds (66 per cent) are having a difficult time hiring people with the skills needed to grow their business, and 56 per cent are finding it hard to recruit "talent of the future", like engineers, data scientists and developers, finds KPMG.
Three-fourths (74 per cent) of them believe Canada needs to welcome more foreign talent to meet business labour force needs and become an innovation leader.
