Business leaders looking for a return to normalcy following a biannual global pandemic are surely disappointed as a series of new obstacles are challenging companies to adapt once again.
These challenges are multifaceted and far-reaching.
According to PwC’s November Executive Pulse Survey, 90 percent of executives are moderately or very concerned about the economy, and 81 percent of business leaders agreed that the economy will dip into a recession in the next six months.
At the same time, soaring inflation and rising interest rates are diminishing companies’ spending power, requiring them to act strategically to bolster growth in the year ahead. Meanwhile, a curious combination of talent shortages and layoffs is putting pressure on leaders to conduct a high-stakes balancing act when it comes to talent acquisition.
When coupled with a steady decline in institutional and venture capital investments, it’s clear that businesses will need to strategically navigate the complicated road to profitability without a cash infusion from investors.
Here’s how leaders can mitigate the top business risks and make the most out of the continuously uncertain times that we seem to find ourselves in as a globally connected economy.
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#1 Horizontally Expand Staffing Opportunities
Even as economic headwinds and tech sector layoffs make headlines, many executives are continuing to invest in employee engagement and retention initiatives, including flexible work arrangements, salary increases, and other incentives intended to keep employees happy.
Data from the Human Workplace Index Survey found that more than one-third of employees plan on leaving their current job in the next year, underscoring the importance of employee engagement even in a recession-altered business environment.
As a Forrester analyst succinctly explains, “Recession-focused firms will slow EX investments and pay the price.”
Horizontally expanding staffing opportunities is the key to developing a recession-ready, company-committed workforce.
Simply put, horizontal staffing enables people to develop their professional skills and divide their time among different projects and organizational priorities. This arrangement allows employees to evolve as professionals, building the skills and experiences needed to succeed in the future of work.
A 2022 survey by Amazon and Workplace Intelligence concluded that 70 percent of workers felt unprepared for the future of work, and 80 percent are afraid they lack the skills to advance their careers. Two-thirds of survey respondents said they were “at least somewhat likely” to leave their current job because they don’t have enough opportunities for skill development and career advancement.
Horizontally expanding staffing opportunities makes companies more agile while reading employees to advance their careers in-house. Horizontal staffing is a win-win for companies and their employees, and it’s critical making the most out of 2023.
#2 Double Down on Recurring and Successful Business Ventures
Exploration and innovation can propel businesses forward; however, doubling down on existing recurring and successful businesses can help companies thrive in a difficult economic environment.
Several prominent enterprises, including Apple, have already slowed their R&D investments in favor of elevating existing revenue streams.
To be sure, companies should invest in R&D whenever possible, but doubling down on recurring and existing business ventures is key to maintaining revenue streams in a difficult economy.
#3 Optimize for Efficiency and Results
Unnecessary and unhelpful employee expectations are plaguing companies of every size and every sector.
Especially as companies embrace hybrid and remote work, people are working longer hours while eradicating any remaining semblance of work-life balance. As a result, employees are reporting record levels of stress, burnout, and depression.
This is bad for people, and it’s bad for business. It’s not sustainable.
To get the most out of 2023, businesses must support their employees without compromising results. Reorienting businesses around a Results Only Work Environment (ROWE) is a good place to start.
ROWE eliminates many popular success metrics like online activity, hours logged, or messages sent. Rather than conflating business with success, companies should identify their desired results and assess employee impact accordingly.
In doing so, they provide a more sustainable work environment that supports people and promotes critical outcomes, allowing companies to achieve success in 2023 and beyond.
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Closing Thoughts
Even as fear, uncertainty, and doubt proliferate throughout the business community, many companies are confident that they can achieve better outcomes even in a difficult environment.
Seventy-seven percent of business leaders say they are optimistic they can achieve their near-term growth goals.
By mitigating the most pressing business risks, companies can make the most out of another uncertain year, building and maintaining companies that are more agile, sustainable, and impactful than ever before.
