Dive Brief:
- In a survey of more than 500 C-suite and senior executives, around 40% of respondents said that layoffs were either on the horizon in 2023 or that they had just conducted layoffs. West Monroe, the firm that conducted the survey, also added that some employers were hesitant regarding layoffs.
- In considering layoffs, respondents cited the impact on employee morale as a top challenge (67%), followed by how many people to let go (31%) and the impact to the company’s reputation (28%).
- Collectively, companies cited the economy and inflation — followed by labor and employee issues — as their biggest challenges over the next 12 months.
Dive Insight:
These findings come on the heels of multiple, arguably conflicting reports on whether employers have regained control over the state of U.S. labor — or if it’s still staunchly an employee’s market.
A November 2022 report from Visier indicated that team members are more likely to follow their departing co-workers out the door than nonteam members. When it’s an involuntary resignation, co-workers were 7.7% more likely to quit, Visier research suggested. When a worker quits a job voluntarily, their co-workers are 9.1% more likely to follow.
In short, turnover contagion is real and researchers urged talent professionals to stay vigilant for decreased team member productivity in the aftermath of a quit — and maybe even conduct stay interviews.
A November 2022 report from the Society of Human Resource Management shed light on turnover within the HR industry specifically: lack of sufficient compensation, as well as little opportunity for career advancement and development, topped the list of reasons why people left.
A report from Willis Towers Watson, also published this month, adds additional context to the U.S. labor market situation. Per WTW researchers, employers on average are looking to boost 2023 salaries by 4.6%, largely due to inflation concerns and an unflinching labor market. C-suite leaders plan to make room in their companies’ budgets by adjusting compensation and benefits plans, increasing the price of goods, and through head count reductions.
On the precipice of 2023, it appears only time will tell which party wins the workplace tug-of-war.
