For several years, economic uncertainty has cast a shadow over many organizations’ business and talent strategies. However, when it comes to the country’s short-term economic outlook, a recent survey from PwC found that only 17% of executives strongly anticipate a recession within the next six months, a significant drop from 35% in 2022.
That optimism is one of the key findings in PwC’s recent Pulse Survey: Finding Opportunity in Reinvention.
According to PwC’s Workforce Transformation Leader Anthony Abbatiello, this growing economic confidence among business leaders is prompting organizations to pivot from a defensive stance to one focused on growth and transformation, creating new demands for HR leaders.
“For CHROs, this means an increased emphasis on strategic initiatives that drive long-term value,” he says.
Among these strategic initiatives, Abbatiello explains, is a heightened investment in technology and workforce development. However, despite the enthusiasm shown for new technologies, 88% of executives report challenges realizing measurable value from these investments.
“This underscores the critical role of CHROs in ensuring that technology adoption is not just about implementation, but also about optimizing human capital to fully leverage these advancements,” he says. Effective training programs, continuous learning opportunities and aligning tech investments with business outcomes are essential strategies to overcome these challenges and embrace reinvention, he adds.
As economic confidence grows, nearly three-quarters of executives also feel confident in their ability to attract and retain the necessary talent, and believe they possess the right cultural framework for HR reinvention. Most of the executives (76%) say they have the right talent mix to support the company’s future vision, and the same percentage say they have the capabilities to execute business model changes at scale. But 84% also say that executing at the pace needed to win in the market is a challenge.
HR leaders’ role in sustaining reinvention
The report found that as talent and tech strategies accelerate and executives’ growing confidence in the economy, the time is right for organizational reinvention.
For instance, more than a third of CEOs say that the average competitor in their industry will be out of business within three years if it doesn’t change its business model. And reinvention is already underway at many organizations: Roughly 75% of companies PwC surveyed have started or completed measures to reach new customers directly, to make their products “smart” and to build collaborative networks to share value, among other reinvention efforts.
Despite that, there appears to be a gap in executive alignment: Nearly six in 10 executives say there’s strong consensus about the company’s future vision, but only 41% say the same about how to get there.
Looking ahead, Abbatiello says, HR leaders must focus on sustaining a compelling employee value proposition and fostering an organizational culture that is adaptable and innovative. This can translate into adopting a proactive talent management strategy that employs a comprehensive talent architecture—integrating job and skills frameworks—to meet evolving business needs.
“It also means leveraging ‘talent intelligence technology’ to source skills from within the organization,” Abbatiello adds.
Data-driven approaches to enhancing organizational culture, he adds, can also significantly support reinvention efforts, while HR leaders should also work to engage employees in key change initiatives.
“It’s critical to securing employee buy-in, reducing resistance and facilitating smoother transitions during periods of transformation,” he says.
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