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If you log into sites like LinkedIn semi-regularly, you've probably seen hundreds of messages from employees affected by major layoffs at companies. These layoffs have created a sense of fear with workers across the globe, so we wanted to understand how company CEOs are handling these turbulent economic times.
We’ve surveyed 300 US-based CXOs and senior decision makers to understand their thoughts on the current market in a recent CEO Outlook Report. Let's dive in to understand how modern CEOs think about layoffs, headcount planning, ways to reduce costs and how candidates fare in today's job market.
Despite major tech layoffs, CEOs are still optimistic about the year ahead
A large majority – 81% of our respondents – are optimistic about the first half of 2023. More so, the year's second half is looking even brighter (84%) for CEOs across the country. While headlines seem to focus on doom and gloom, our survey results show that CEOs see a different picture. When we asked them to evaluate employment levels, interest rates and GDP growth, they saw the potential that this year brings.
While CEOs remain optimistic about 2023, they are still keeping an eye on the current economy and workforce. For example, when asked about the top three issues facing companies in 2023, 64% of respondents picked economic turbulence, while 62% and 27% of CEOs selected inflation and staff retention, respectively.
Company leaders are considering other creative ways to reduce costs
While many organizations have looked to reduce headcount planning expenditures in 2022 and 2023, some CEOs are beginning to understand the importance of innovative cost-cutting measures.
“Tightening the belt is a natural and prudent course of action in a volatile economic climate. Some companies will be forced to reduce costs to protect future growth. However, this study shows that CEOs appreciate that their talent is their greatest asset, and they must consider every course of action before jobs are lost,” said Daniel Chait, CEO and Co-Founder of Greenhouse.
This recession is notably different from previous ones because in-demand talent is extremely mobile.
–Daniel Chait, Greenhouse CEO
So, what are the ways CEOs plan to cut costs if needed? One of the most significant cost-cutting measures leaders are considering is real estate. In fact, 54% of the executives we surveyed would consider cutting real estate costs before considering cutting labor costs.
Commercial real estate investments have been a continued source of tension since the beginning of the pandemic in 2020. As more companies consider a hybrid/remote business model, it becomes easier to downsize or remove real estate holdings altogether.
Other potential cost-cutting strategies CEOs are considering include reducing: marketing and advertising, wages and even certain benefits. As employees struggle with survivor's guilt and fear the stability of their jobs, making adjustments like this can help everyone feel more at ease.
Another strategy that has recently made headlines for companies like Zapier are secondments. Instead of letting go of underutilized employees, companies are opting to temporarily move these individuals to other departments. Many skills are transferable, and employees could learn new roles if given a chance.
Candidates still have a say in the current job market
While there's a lot of economic uncertainty in the job market, many leaders still feel like candidates have a slight advantage in this job market (especially during the negotiation phase.) If candidates look outside the technology sector, they'll find companies that need valuable talent.
When we asked about 2023 headcount plans, around 10% of the CEOs we surveyed expected to decrease their employee count. While some CEOs plan to stay at their current employee count, around 68% are planing on increasing headcount this year.
As these leaders post new opportunities, they understand that candidates still have a say in the current market. Here are the candidate demands that CEOs are taking seriously in 2023:
- High wages
- Job security
- Healthcare, dental, and vision insurance
- Hybrid or flexible work
- Diversity, equity, and inclusion
Daniel shared, "Our internal data at Greenhouse supports the feedback we are seeing from CEOs. The number of jobs and offers has decreased, but candidates are still turning down offers at a rate of 11–12%, showing that they are still in an advantageous negotiating position.
CEOs are still predicting a skills shortage and employment levels remaining high, companies that put people first will find it easier to hire.
–Daniel Chait, Greenhouse CEO
As companies strive to find top talent today, it's essential to understand what you can bring to the table. Many candidates are selective about the roles they apply for, interview for and take. You might not be able to offer the robust perks, but candidates are beginning to understand that tech giants with free massages aren't all they're cracked up to be.
While the CEO outlook looks a bit different from the candidate experience report we published just last year, there’s a lot of great information to share. CEOs understand that the mass tech layoffs that have been happening in the last year aren’t acceptable long-term.
There's optimism, alternative cost-cutting measures and proper thought being put into the candidate experience. While there are still uncertain times ahead, great companies emerge from challenging times.
See the report
Are you interested in learning more from Greenhouse’s 2023 CEO Outlook Report? See the full report here.