As inflationary pressures and other economic bottlenecks propel the United States into a technical recession, large companies have slowed hiring or introduced layoffs. According to the survey, 46% of businesses are decreasing signing bonuses and 44% are rescinding job offers, while 50% are “reducing their overall headcount, even as business leaders remain concerned about hiring and retaining talent.”
Indeed, Americans have continued to opt themselves out of the job market in the wake of COVID and the lockdown-induced recession. The labor force participation rate has dropped from 66% in 2008 to 62% in 2022, falling 3% between February 2020 and April 2020 alone ahead of a slow recovery, according to data from the Bureau of Labor Statistics.
Yet companies are still pressed to find talent equipped with technological ability. Roughly 63% of businesses have “changed or are planning to change processes to address labor shortages,” according to PwC, marking a 7% increase from its January survey. In order to increase access to talent — which 38% of respondents named as a serious risk — companies are expanding opportunities for remote work, pursuing acquisitions, or changing human resources strategies.
“Ironically, as businesses pivot even more toward automation, it’s critical to find employees with the right combination of deep functional knowledge and technology know-how,” PwC explained. “Without the right talent, automations can fail to deliver on promised efficiencies and increase operational risk.”
In the wake of President Joe Biden signing the Inflation Reduction Act, business leaders are concerned about potential tax implications. The legislation created a 15% book minimum tax with differing effects across multiple industries, according to an analysis from the Tax Foundation, which explained that the provisions “would have distortionary impacts on investment, and may prove ineffective as a stable revenue raiser.”
While 28% of the survey’s respondents cited tax policy as a serious business risk, 41% of executives in the pharmaceutical and life sciences sector said the same due to the law’s provisions geared toward lowering the costs of prescription drugs and health insurance.
Meanwhile, business leaders remain concerned about the effects of inflation, although to a somewhat lesser extent than earlier this year. Roughly 62% of respondents predict that inflation will “remain elevated for the next 12 months” — a decline from 69% of respondents who said the same in January.
Respondents also listed building “trust” as an important business goal, with 65% affirming that they are focused on “refining their trust strategy” over the next year. PwC noted a link to the stakeholder capitalism movement, which posits that companies have a mandate to blend the maximization of profits with involvement in social issues.
“As the yardstick for company performance expands beyond financial metrics, companies have an imperative to build trust and transparency among different stakeholder groups — employees, customers, suppliers, regulators and the communities in which they operate,” PwC explained. “This includes both doing the right things and communicating clearly on topics such as reporting and tax transparency.”
American investors, however, are not necessarily on board with such endeavors. While 29% of respondents to an exclusive poll from The Daily Wire agreed it is a “good thing” for companies to leverage their financial power for political or social means supported by executives, 58% — twice as many — said it is a “bad thing.”