A survey of 722 business executives finds a full 83% of business executives are focusing their business strategy on growth, despite economic headwinds, with increased investments in digital transformation (53%), IT (52%), cybersecurity/privacy (49%) and customer experience (48%) being planned by roughly half the respondents.
Conducted by PwC, the survey also finds more than a third of C-level-execs (36%) are transforming business processes to a great extent.
Paradoxically, a full 50% said they are also actively reducing total headcount, with 60% of respondents reporting they believe a recession will occur in 2022. Nearly half have dropped or reduced signing bonuses (46%) or rescinded job offers (44%). However, only 30% of respondents said a recession represented a serious risk to the business. The survey identifies cybersecurity (40%) and talent acquisition and retention as the most serious risks to the business.
The primary reason organizations are less concerned about a recession is they are generally more resilient in the wake of the economic downturn brought on by the COVID-19 pandemic, noted Bhushan Sethi, joint global leader for people and organization at PwC. More than two-thirds of respondents (69%) said they are referring to a lessons-learned playbook developed in the aftermath of the pandemic.
More organizations appear to be looking to hire specialists to drive critical initiatives that in part, thanks to automation, should enable them to reduce headcount while continuing to grow the business, he added. More than half of respondents (52%) said they’re considering an acquisition to gain access to needed talent. Overall, 70% of respondents said they are considering an acquisition.
Regardless of business strategy, in the wake of the downturn there is also now more scrutiny applied to digital business transformation initiatives as organizations look to focus on projects that have the most promising potential, Sethi noted. “There will be more scrutiny of use cases,” he said. The survey also finds that nearly two-thirds of respondents (65%) are focused on developing and/or refining their trust strategy.
It’s not clear to what degree the continued employment of executives depends on the success of those initiatives, but as organizations continue to invest it’s only a matter of time before they are asked to show a return on investments. Nevertheless, 40% of respondents also said they are planning to increase overall investments in research and development.
In the meantime, the survey also confirms the way organizations operate has been forever altered in the wake of the COVID-19 pandemic. A full 70% of respondents said they have either implemented, or have a plan in place, to expand remote work options. The survey also finds only 31% of respondents plan to increase their investments in real estate, while 22% are planning a decrease. Those reductions are greater than any other part of the business, the PwC report notes.
Despite all the inherent challenges associated with digital business transformation initiatives, it appears business executives understand their organizations will need to innovate or perish as competition intensifies. The challenge, of course, is to first identify the projects that provide a true competitive advantage and then, secondly, making certain those projects are completed in enough time to have a meaningful impact on the bottom line.