Challenger Fall 2023 HR Trends & Issues Survey Results
46% of Companies Expect a Recession
Published October 17, 2023
See the full infographic HERE.
Several economic indicators suggest that while the labor market remains tight, consumers and businesses are approaching the end of the year with caution. In a new survey, 46% of companies expect a recession, with 24% actively planning for one. That number jumps to 52% for companies with more than 5,000 employees, according to new survey results released Wednesday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Challenger surveyed 207 HR and business leaders online at companies of various sizes and industries nationwide about hiring, layoffs, retention, and leadership. The survey was conducted September 10th through October 13th, 2023.
Recession Plans & Cost-Cutting
In the survey, 29% of companies are currently or are planning to undergo layoffs, with another 4% anticipating the need for layoffs. This is down from 45% and 8% respectively that were experiencing or anticipating layoffs in the Spring of 2023.
“We know that many companies have conducted layoffs during the first three quarters of the year, since announcements are up 198% over the same period last year. It seems a lot of the cost-cutting companies planned was carried out prior to the fourth quarter,” said Andrew Challenger, workplace and labor expert and SVP of Challenger, Gray & Christmas, Inc.
Another 4% have redeployed their workers into other roles, while 5.4% have frozen or reduced hiring.
Over 13.2% of companies said they are cutting costs in other ways besides layoffs, similar to the 12.5% who stated this in the Spring. Of those a whopping 76% of companies are reducing business travel, up from 59% that reported this in the Spring.
Remote & Hybrid Work
“The reduction in business travel could be due to the lasting impact of remote and hybrid work. It certainly appears companies do not expect workers to be in an office five days a week and are more willing to stream workers into meetings than fly them,” said Challenger.
In fact, 54% of companies reported they have a remote or hybrid schedule with no plans to bring them back to the office full time, up from 42% that reported this in the Spring. Six percent of employers said they are fully remote, giving up most or all of their office space, up from 0 leaders who reported this in the Spring, but similar to what companies reported at the same time last year.
Fewer companies report allowing remote and hybrid work on case-by-case bases, suggesting employers have opted for overarching remote work policies.
When asked how often workers are typically in the office, the three-day in-person work week seems to have won: 33% say their workers are in the office 3 days a week, up from 26% in the Spring. Another 24% report workers are in-person two days a week, down from 29% of employers who reported this in the Spring survey.
Flexibility continues to reign as the number one employee priority across the four surveys conducted since Spring 2022. Meaningful/Purposeful Work moved up to the second-highest priority by weighted average in the Fall from the fifth position in the Spring. Upward Career Trajectory moved into the third position from the fourth, while Higher Salaries moved up a position. Empathetic Leadership fell to the fifth position.
A smaller share of companies report their workers have a favorable view of leadership than they did in the Spring: 56% of companies say their employees have a favorable view of leadership, down from 65% who reported this in the Spring. Slightly more (5%) companies report their team members have a mixed view of leadership, compared to 2% in the Spring.
More employers believe the low view of leadership is due to a perception that the team lacks effectiveness, with 21% reporting this in the Fall, compared to 14% in the Spring. Another 24% report workers have a lack of trust with their leaders, due to inconsistency in leadership, up from 19% in the Spring. Nearly 23% of companies report workers are burned out and attribute it to leadership, up from 14% in the Spring.
Meanwhile, 45% of companies believe their workers have an unfavorable view of leadership due to a lack of communication from the leaders, down slightly from 48% who reported this in the Spring.
Filling open positions has become easier for most companies, as 30% report they had some difficulty, but it is getting easier. Another 17% report they are not currently hiring or have frozen hiring, down from 27% in the Spring.
In order to attract workers, 70% of employers report offering hybrid work arrangements, fewer than last Fall, but up slightly from the Spring. Another 48% of employers are offering Mental Health Care Options, down from 66% in the Spring.
Meanwhile, 44% of companies are offering Higher Pay/Bonuses, down from 55% in the Spring, and hitting the lowest point for that option since the firm began the HR trends survey in the Summer of 2021. Diversity, Equity, Inclusion, and Belonging Initiatives have also fallen to the lowest point since last Spring, when the option was included.
Artificial Intelligence (AI)
So far this year, companies have attributed 3,997 job cuts to artificial intelligence, according to Challenger Report data, either due to pivoting to developing this technology or using it to replace positions. In the Fall, 22% of companies are looking into using this technology in their HR operations, up from 11% in the Spring. Another 12% report they are actually utilizing AI in their operations, up from 0 employers who reported this in the Spring.
Nearly 47% of companies report they plan to or are using this technology as a tool for employees to become more productive, while 40% reported they will use it to replace employee functions and streamline operations. Another 27% reported they plan to or are using it in the customer experience.
Demographics of Survey Respondents
# # #
Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
Download Survey Report