If 2022 proves anything, it’s to expect the unexpected. Just as businesses breathed a sigh of relief that the worst prospect of a pandemic was over, Russia invaded Ukraine. Then summer comes and the world sadly breaks records on climate change, from rising temperatures to rising sea levels, before inflation picks up in Q4.
Unfortunately, 2023 won’t go much smoother.
From Fortune’s conversations with more than 20 chief executives, one thing is clear: 2023 will be a harrowing ride.
Last year’s buzzwords like remote and flexible working are like worlds away from the challenges posed by war, recession and global unrest, but rest assured that while you can’t control the external chaos that affects your business, you can control your response.
The ‘Great Unretirement’ and the clash of generations
As energy, mortgage and food costs rise, more and more older workers are unable to retire and are changing their retirement plans — and some retirees are choosing to return to work instead.
Research, by Royal London, found that a third of those who will retire in the next 5 years change their plans due to the cost of living crisis.
CEO and chairman of British recruitment firm Reed, James Reed, said that while businesses hiring people over the age of 50 was an “encouraging trend”, leaders needed to tackle ageism bias in hiring and retention.
“The skills that older workers offer, including a different but important perspective on workplace decisions and a broad level of experience, should not be underestimated. Older workers are invaluable, and companies need to think creatively about attracting this group .
That could mean scrapping the current screening process or online applications that can cause “frustration” among older workers.
Leaders also expressed concern over the multigenerational workforce that is emerging as a result of embracing non-retired workers alongside Gen Z who are rocking the world of work.
Leaders must adopt different communication styles and command a culture that respects opposing views, to avoid generational clashes in 2023.
improve short-term
“Times don’t always tend to return to what they’ve felt and done before,” said Sairah Ashman, global CEO of advertising agency Wolff Olins.
They are not only concerned that a global recession will cause businesses to stagnate and choose short-term solutions over innovation.
“I’m worried that too many businesses will focus on short-term corrections this year: external and internal,” Will Higham, author and CEO of the strategy consultancy, Next Big Thing agrees while adding that “it’s a natural reaction in permacrisis when every day is a struggle. “
Leaders may be tempted to scale back technology-driven innovation, or go the other way and introduce technology at the expense of human labor to save money in the short term.
But the truth is, before making drastic cuts, leaders would be wiser to make the best investments to align with their long-term vision.
Those who do not carefully balance managing costs in the short-term and delivering the same return to shareholders, with making bets that will secure the future and deliver on the business strategy, “the risk of finding themselves in an unwanted precision that can lead to . he’s out,” Ashman added.
Balancing rising costs with ESG
Many businesses have made ESG (environmental, social, and corporate governance) commitments during the pandemic, so it’s no wonder that many CEOs are concerned about keeping those promises during the downturn.
The double pressure to reduce costs while reducing the environmental footprint means that leaders must do more with less.
So, some leaders including Ana Paula Assis, general manager and chairman of EMEA IBM, advised companies to rely on technology to save money and operate more sustainably.
“By investing in technologies such as automation and IT infrastructure modernization, companies can drive efficiency while developing initiatives around circular supply chains, just energy transition and consumer empowerment,” he said.
Joni Rautavuori, CEO of the manufacturer Tharsus Group, stated that “the right investment in flexible automation” of the business can better provide a long-term strategy and compete on the global stage – to which he added that sustainability and productivity are “key”.
Meanwhile, employers who ignore the social governance aspects of their ESG credentials will not be forgiven by employees (or consumers) even when the economy is in trouble.
“This will especially be hard to box with the increased cost of living and continued recruitment challenges,” says Amali de Alwis, CEO of the climate investment firm, Subak.
Actions for purpose-driven promises could range from keeping the breakfast bar in the office during The Great Resignation, to more serious things like raising workers’ wages to keep up with the rising cost of living.
Executive leaders, like Alwis are well aware that the first steps will be difficult to implement “against the background of increased operating costs and muted consumer appetite”.
As with businesses, workers are experiencing cutbacks and depression – but few will be willing to fight employers who won’t hold back.
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