Recessions can be scary, but like most things in life, they pass.
- A KPMG survey shows that 86% of top executives believe a recession is coming.
- CEOs are preparing for a recession, and some have already implemented hiring freezes.
- Even if a recession hits, the majority of CEOs are optimistic they will weather the storm.
It can feel like you can’t open a newspaper or surf the internet without seeing another warning of impending economic doom. Unfortunately, there’s not much the average person can do to stop a recession. The best we can do is try to prepare so we can minimize the impact should the worst happen.
In this respect, there is reassuring news from KPMG’s latest CEO Outlook Report: More than three quarters of the 1,325 CEOs surveyed have plans to weather a recession. Another positive? While 86% of CEOs expect a recession in the next 12 months, 58% believe it will be mild and short.
Optimism despite turbulence
Whether you’re an employer or employee, nurturing the ability to roll with the bats is critical to long-term success. The fact that many CEOs are already preparing for a recession could be why over 70% are relatively optimistic about their company’s prospects over the next six months.
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CEOs are looking for ways to minimize the damage caused by an economic downturn. These include trying to improve productivity and control costs, as well as shifting their strategic priorities. Still, 75% said they thought a recession would make it harder to recover from the effects of the COVID-19 pandemic, and 73% thought it could hurt their company’s growth over the next three years .
A possible recession is not the only challenge facing companies today. CEOs are also looking for ways to deal with pandemic fatigue, inflation, and operational and regulatory challenges. Personally and professionally, the last few years have been extraordinary for many people and that is now playing out in the global economy and also in our working lives.
CEOs have a number of tools at their disposal to navigate the difficult waters. More and more top managers are investing in the further training of their employees. Retaining top talent is seen as a top operational priority, which means investing in people and creating a more transparent work environment.
CEOs are preparing for a recession – are you too?
Take a page from the books of these top CEOs and do what you can to prepare for an upcoming recession. Some important steps you can take:
The more money you can now put into a savings account set aside for emergencies, the better prepared you are for any kind of financial crisis.
The job market is strong right now, so if you’re having a hard time paying your bills and building up your emergency reserves, it might be worth taking on a part-time job. Remember that there are pros and cons to taking on extra work. It can bring in extra money and expand your work opportunities, but your time is valuable too. Make sure your side hustle doesn’t interfere with your ability to perform at your regular job.
Prepare for a possible job loss
One of the biggest concerns about recessions is the potential for job losses. It’s a valid concern – the CEO survey showed that a number of company leaders believe they need to lay off employees. Almost 40% have already implemented hiring freezes, and 46% believe they may need to reduce their workforce in the next six months.
Take some time now to think about what you might do if you get laid off. How could you cope financially? How would you go about looking for a new job? What skills might you need to get hired? Now is a good time to dust off your resume and reach out to your professional network. It’s better to connect with people now than later when you actually need their help.
If your company offers additional training, take advantage of it. Not only does it show that you are motivated to learn, but it also helps you when you need to look for a new job. If that’s not an option, check out online courses, books, and industry newsletters. Anything that helps you stay abreast of trends and opportunities in your industry is a win.
Recessions are scary, especially when they come after the chaos caused by the pandemic. But they are also part of a normal economic cycle. If there is a recession in the coming year, it will pass. So the best way to prepare is to brush up on your professional skills and build up your savings as much as possible.
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