'Recession ready' leaders unveil future hiring plans

Research shows disparity between economically prepared CEOs and their counterparts

BY Dexter Tilo 21 Oct 2022

Despite reports of organisations pausing their hiring because of the current economic climate, a new report found that “recession ready” leaders aren’t slowing down their recruitment plans. Research from Aon found that 79% of the respondents are expecting a recession this year. However, only 35% of them feel "very prepared", 47% are "somewhat prepared," 15% are "only a little prepared," and three percent are "not prepared at all."

For those who are "very prepared" for a recession, the report found that only 49% of them have slowed or frozen hiring, compared to a higher 54% of not-so prepared leaders.

However, "very prepared" CEOs were also more likely to lay off employees (45%), cut off employee benefits (39%), and cut off employee compensation (38%), compared to their not-so prepared counterparts, where only 32% of them carried out each these actions.

"Very prepared" leaders were also more likely to:

Reduce marketing budget
Increase prices
Delay raising new capital or debt
Reduce R&D budget
Delay capital investment

Characteristics of confident leaders

Based on the report, leaders who said they were very prepared for a recession shared "four fundamental values":

Embracing risk is the only option. According to the reports, these leaders don't address risk as a choice, but a question of survival.
Don't hit the brakes on long-term investment — or ignore long-tail risks. Very prepared leaders do not lose sight of "long-tail risks" such as social inequality, cryptocurrency, and disruptions to the market, read the report.
Analysis and advice from internal and external stakeholders are vital in making better decisions. The report said the most prepared leaders are focused on input from internal teams and outside help.
COVID-19 has shown that risks are interconnected. The best-prepared leaders strongly believe that the pandemic taught them how to respond quickly to risks, according to the report, which gave them confidence as they face recession.

"Strong, prepared leaders are essential to protecting an organisation's resilience and finding growth opportunities in the face of heightened volatility," said Greg Case, chief executive officer of Aon. "This year's report reveals that leaders who are very prepared to weather economic challenges embrace calculated risk-taking as an engine of growth."