More than 80% of CEOs have implemented or plan to implement a hiring freeze in the next six months, reports KPMG’s latest CEO Outlook for South Africa.
The financial services firm’s new research interviewed 50 top CEOs from various industries between July and August to learn about their perspectives on the nation during the previous 18 months and their plans for the future.
Results from the poll of South African CEOs were compared to 1,300 global executives who were on par with them. According to KPMG, all respondents led companies with annual revenues of $500 million or more, and a third of the organisations polled had annual revenues of more than $10 billion.
KPMG found that in light of an anticipated recession, companies and their executives are being pushed to reconsider their strategies, with talent retention as one of the pivotal factors that are being addressed.
Juxtaposed with international concern, a smaller percentage of CEOs in South Africa foresee a recession coming in the next year. Despite this, 86% of the surveyed CEOs globally expect there to be one.
Of the CEOs predicting a recession, 72% claimed to have taken proactive initiatives to enhance productivity and be as prepared as possible. CEOs in South Africa are much more worried about the immediate effects of a recession.
The anticipated global recession has led to a significant emphasis on a short-term halting of hiring practices and headcount reductions globally.
Of the surveyed South African CEOs, 36% have already stopped hiring. This is almost in line with the 39% of CEOs globally who have done the same.
Some CEOs are also considering downsizing their workforce over the next six months, with 42% of the South African CEOs considering such and only 34% of CEOs globally.
KPMG reported that when the CEOs looked at the economy through a longer-term view – 70% of South African CEOs and 76% of the global expected their organisation’s headcount to increase by 10% over the next three years.
“CEOs are still investing in their existing workforce, with 72% local CEOs compared to 50% CEOs globally focused on boosting productivity,” said KPMG.
Chief executives have had to think hard and long about attracting and retaining talent in South Africa in light of evolving economic situations and challenges.
It has become increasingly important for CEOs in South Africa to recognise employee-driven business transformations; many have adopted this approach, reported KPMG.
“78% of CEOs in South Africa, compared to 71% of CEOs globally, agree that the ability to retain talent with the pressures of inflation/ rising cost of living are top of mind, as are the long-term impacts to organisations from the pandemic and geopolitical tensions.”
Despite a possible hiring freeze, many employers also stress retaining current staff.
A few months back in August, financial services company PwC, after analysing trends among executive directors, found that employees in South Africa with in-demand skills have the upper hand.
“The truth is, employees with specialised skills and training are in demand — and they know it,” said PwC.
It added that businesses that are hiring could no longer rely solely on guaranteed pay as a retention strategy. Employees nowadays are seeking higher levels of work-life integration, which is a negotiation process, said PwC.
Employers should anticipate that workers would exert greater pressure to obtain what they now consider to be minimum standards, said PwC. Benefits include professional development and upskilling possibilities, competitive pay, and additional perks.
One of the most favoured retention methods is offering employees the option to work from home on and off in a hybrid workplace model. KPMG said that this had a positive impact on hiring and productivity over the past two years.
Although it has shown promise, KPMG said that hybrid work is likely to cool off as 76% of local CEOs envision people returning to the office within the next three years.