Dive Brief:
- Although leading CEOs and investors have diverging views about the economic climate (73% of CEOs expect it to worsen during the first half of 2023; 76% of investors expect it to improve), they’re aligned about one effect: 86% of CEOs and investors believe deglobalization is a reality, according to a survey released Dec. 20 by global advisory consulting firm Teneo.
- CEOs are already taking steps to prepare for deglobalization, including adjusting supply chains (46%); looking at M&As (38%); relocating physical operations (38%); and on-shoring their workforce (32%), the survey found. Investors agree with these strategies, but they’re “hyper-focused” on finding new sources of funding, Teneo said.
- Even in the face of a looming recession, 15% of CEOs are prioritizing investment in environmental, social and governance-related activities (ESG) over business performance, according to the survey. However, while more than 60% of CEOs are working to balance company performance and ESG commitments, nearly 1 in 5 of those who run large companies said they feel unprepared to handle the next controversial social issue, according to the survey.
Dive Insight:
As corporate leaders take steps to deglobalize their business and address an uncertain economy, HR professionals will be handling critical workplace issues, particularly in terms of the direction companies need to take to keep their top talent happy, Jason Walker and Rey Ramirez, co-founders of the minority-owned HR advisory firm Thrive HR, wrote in a December op-ed to HR Dive.
For example, when companies bring more of their business back to the U.S., personnel that corporations borrowed from other countries will need to move as well, or skilled workers will have to rise through the ranks in the U.S. to fill positions at all levels, including executive roles, Walker and Ramirez said.
This highlights another area where HR expertise is crucial: Identifying and training current employees for future leadership roles. In their op-ed, Walker and Ramirez predicted companies will place a stronger focus on filling critical vacancies with existing staff, which in turn shows other employees they can grow with the company.
Walker’s and Ramirez’s prediction aligns with findings by a recent Lattice survey that retention, not hiring, is a top priority for HR heading into 2023. Lattice found that high-performing HR teams invest in learning and development programs, namely upskilling and career coaching for their employees.
The CEOs who responded to the Teneo survey seem to recognize this: They indicated a need to equip the next generation for corporate leadership, the firm said. Specifically, investors want to see CEOs double the representation of voices of the next generation in today’s C-suite, it noted. But only 28% of CEOs felt their current executive teams represent the perspectives of future generations. Both listed numerous skills they believe the next generation needs for leadership roles, such as thinking, management and technology expertise.
However, for managers to be a positive force for change, they have to have the tools and guidance to be effective, a spokesperson for online training platform Kantola previously told HR Dive. And such tools need to be practical, actionable and relevant to real-life issues, like managing diverse teams and conflict resolution, the spokesperson said.
The Teneo findings that nearly two-thirds of CEOs recognize the importance of balancing ESG investments with business operations also bodes well for diversity, equity and inclusion initiatives. According to new research from Glassdoor, DEI programs appear to be stalling after two years of gain.
But this slowdown could just be companies taking a “breather,” Glassdoor’s chief economist recently told HR Dive. Still, as businesses tighten budgets amid a softening economy, HR leaders will have to make a much stronger case for why D&I efforts matter to executive teams, he said.
