As signs of a U.S. economic slowdown mount, about half of American companies are planning to cut jobs, even as business leaders fret about the difficulties of hiring and retaining talent, according to PricewaterhouseCoopers (PwC).
“This comes as no surprise,” the company said in a statement. “After a frenzy of hiring and a tight labor market over the past few years, executives see the distinction between having people and having people with the right skills.”
‘Cautious Optimism’Overall, despite weaker economic signals and a broad array of business risks, business leaders expressed “cautious optimism” about their future prospects. Just over four-fifths are focusing their business strategy on growth and only 30 percent see recession as a “serious risk,” according to PwC.
The picture of what PwC described as U.S. businesses “walking a tightrope on talent” comes amid fears of a sharp economic downturn as persistently high inflation pressures the Federal Reserve to hold the course on aggressive monetary policy tightening.
Small-Business Hiring CoolsAmerica’s small businesses aren’t far behind their bigger peers in terms of slowing down on hiring.
“This represents a significant hiring shift, and is largely a reaction to mounting labor costs, skyrocketing inflation, fears of a recession, and rising interest rates,” Alignable stated.
Reflecting a similar “talent tightrope” dynamic that was noted by PwC, the Alignable report showed that 51 percent of small-business employers are still trying to find workers to fill key posts.
By contrast, the Alignable survey found that just 4 percent of small businesses were planning to reduce staff.