70% of companies will freeze hiring plans in the event of a possible economic recession

70% of the large companies that operate in our country will freeze their hiring plans in response to economic uncertainty and the absence of a defined strategy to mitigate the impact of a possible slowdown in productive activities.

Of all the executives surveyed, 44% foresee a stop hiring in the next six months and 26% confirmed that these processes have already been stopped, all this as a strategy in light of the economic outlook in Mexico, according to the study CEO Outlook 2022 the KPMG.

According to the report, the proportion of CEOs who warn about a slowdown in hiring in Mexico in the medium term is higher than that observed globally (35%). Although in the global context, there are four out of 10 CEOs who report that a pause has already been made in the talent acquisition.

This scenario is linked to the perception of senior management about signs of recession and economic slowdown, only a quarter of executives in Mexico say they have a impact mitigation strategy.

At the other extreme, 34% of business leaders in our country consider a reduction in its workforce In response to the economic context, to this proportion must be added the 14% of managers who assure that their company has already cut part of its workforce.

However, the firm’s report warns, the hiring freeze and the reduction of personnel will be temporary measures. But not the whole picture is negative, investment in digital processes gives positive signs for the acquisition of talent. ´

“Although these could be temporary measures, which function as a first line of defense against market challenges, there is currently also competition for attract and retain the right people to increase the competitiveness of businesses, so it is necessary to find a balance between short-term and long-term conditioning factors”, says KPMG in its report.

This explains why 22% of senior managers report that their top priority for achieving business objectives in the next three years is improving the value proposition for employees in order to attract and retain the best talent.

“We are currently experiencing a shortage of talent, particularly talent with certain digital and change skills to achieve transformations and also for new demands such as ESG issues,” Víctor Esquivel, managing partner of KPMG in Mexico and Central America.

However, while 64% of CEOs report growth in investment to adopt technology, only 36% devote more resources to developing new skills and train your employees.

In the opinion of Víctor Esquivel, investment in the development of new skills is something that should not be separated from the resources allocated to digitization. In fact, he explained, the most successful companies are those that maintain a balance between attracting the best profiles and training new talent.

“What many of the organizations do is complement the organization’s talent by bringing people from other places, hiring people from outside. But the organizations that have perhaps been most successful, and that CEOs see as such, are those that lead with purpose and their workforce is committed to goals, but also they are talent factoriesthat is, they hire and attract talent, but they develop it through training and education programs that provide opportunities to move within the organization”, he pointed out.

Goodbye to the permanent home office?

On the other hand, senior management shows more interest in returning to face-to-face schemes than continuing with teleworking, even if it is in a hybrid work model. At least 56% of CEOs envision their workforce in the office full time in the next three years.

In this sense, 42% of CEOs still perceive that hybrid work will remain until 2025 and only 2% see this for remote models full time.

“Companies may be looking to renovate or change office spaces to optimize the face-to-face return to their activities. The preference of managers to return full-time to the workplace may also be due to the challenges that the hybrid modality and completely remote work entails, since they can make it difficult to communicate and maintain the values ​​and feeling of belonging to an organization ”, indicates the firm in its report.

However, KPMG recommends caution in defining the new working models. “It is essential that Senior Management also consider the balance between personal and work life that hybrid and remote modalities grant their staff. These schemes benefit the workforce in ways that are hard to find working full-time in offices,” she points out.