Alarm sirens from the C-Suite about a looming recession are gaining volume in America and elsewhere, but calls back to the office for full-time work are a lot softer.
Most CEOs across the globe shared the view that a recession is on the horizon and coming sooner than later, according to a Tuesday report from KPMG on business-leader outlooks.
Nine in ten CEOs in the U.S. (91%) believe a recession will arrive in the coming 12 months, while 86% of CEOs globally feel the same way, according to the findings from the international audit, tax and advisory firm.
That echoes the foreboding predictions coming from big name Wall Street investors like Stanley Druckenmiller.
In America, half of the CEOs (51%) say they’re considering workforce reductions during the next six months — and in the global survey overall, eight in ten CEOs say the same.
“More than half of the CEOs in the U.S. say they’re considering workforce reductions during the next six months.”
— KPMG report on business-leader outlooks.
One caveat for people who like working from home: Remote workers may find it in their best interest to show their faces in the office as their job security becomes more uncertain.
It is “likely” and/or “extremely likely” that remote workers will be laid off first, according to a majority (60%) of 3,000 managers polled by beautiful.ai, a presentation software provider. Another 20% were undecided, and the remaining 20% said it wasn’t likely.
When asked how they foresaw their company’s working arrangements in three years for jobs traditionally in an office, nearly half of U.S. CEOs (45%) said it would be a hybrid mix of in-person and remote work. One-third (34%) said the jobs would still be in-office, and 20% said it was fully remote.
CEOs across the globe sounded more keen on in-person work. Two-thirds (65%) said in-office work was the ideal, while 28% said hybrid would be the way and 7% said it would be fully remote. The global findings pulled from U.S. business leaders, but also from CEOs in Australia, Canada, China, India, Japan and certain European Union countries and the United Kingdom.
Workers feel emboldened
“It’s difficult to know why the global numbers are so different from the U.S., and they are very different,” Paul Knopp, KPMG U.S. Chair and CEO, told MarketWatch. “In the U.S., we certainly have a hybrid environment as our predominant model going forward for the future.”
The tight job market is one reason for the hybrid-work dynamic, Knopp noted. But so are the fresh memories in recent years, highlighting just how much companies need their employees, he said.
The slew of initial layoffs to deal with the short, sharp recession during COVID-19’s early stages soon morphed into attempts to staff up. Many workers weighed career choices — and saw the jobs market suddenly tip in their favor. “Employers in the U.S. very much recognize people as their greatest asset,” Knopp said, adding, “so, employees are receiving a bit more agency about where they work in the future.”
Other research suggests there’s no full-time torrent of workers back to the office. Through late September, average office occupancy across 10 major cities remained below 50%, according to the security technology provider Kastle Systems. The swipe data showed a rise in recent weeks to roughly 47%, with Tuesdays and Wednesdays typically being the busiest office days.
“‘In the U.S., we certainly have a hybrid environment as our predominant model going forward for the future.’”
— Paul Knopp, KPMG U.S. Chair and CEO
researchers recently warned of ‘productivity paranoia’ among managers about their hybrid workforce. Many bosses appear skeptical that their staff is being productive, even if hybrid workers are scheduling meetings, tapping out emails and corresponding with colleagues at a furious pace.
Other labor-market data released Tuesday hinted at a cooling job market. There were roughly one million fewer job openings in August compared to July, Labor Department data showed. Job openings also fell below 11 million for the first time last November.
Fine tuning the nature of work after the worst days of the pandemic is an ongoing process, Knopp said. Another question for management will be where to cut jobs in the face of a recession, Knopp added. “Business leaders in general are going be cautious about how deep they cut,” he said.