In our latest Quarterly Barometer, released last week, the Alliance Resource Group team shared a snapshot of the most important economic and labor data shaping Southern California and beyond.
Overall, the data aligned with what many economists and other experts are now predicting: A soft landing with no significant recession in 2023. Unemployment rates remain at historic lows, non-farm job growth is robust, and inflation rates have dropped dramatically to 3% during the past three months.
But what does the data mean for California CEOs, CFOs and other leaders? Our team has compiled a list of areas C-Suite leaders should consider.
Adjust or Make Contingency Hiring and Budgeting Plans
Many companies made their annual operating plans at the start of the year with a pending recession in mind. But at the midyear point, a serious recession seems unlikely.
Now, business leaders should reevaluate their plans considering the new economic outlook and either make midyear corrections or have contingencies in place if the original roadmap no longer supports success. These adjustments include hiring, wage levels, special initiatives, and alternative work arrangements such as remote or hybrid work if they factor into operating plans.
Retention Needs to Be a Top Priority
Regardless of what happens with inflation and the economy, the labor market is not going to cool off and the competition for top talent will remain hot. Retention is your best strategy for success.
As always, clear and open communication is key to keeping your top players engaged. Keep the team apprised of changes in the organization. Let them know how the company is doing, what midyear adjustments are being made and how any changes will impact them.
You should always be focused on keeping your best talent. Do not ease up on your retention strategies. It’s not the time to take away company lunches, annual parties, or any other perks you offer to elevate company morale and promote engagement.
Reassess Accounting and Finance Staff Levels
With a recession less likely, it may be a good time to evaluate your current Accounting and Finance team and structure. If you were planning to make cuts, think again. The Accounting and Finance talent supply is especially scarce in Southern California, and that imbalance will take a while to level off.
Greenlighting projects that had been put on hold? You might need to add to your Accounting and Finance teams. If you’re not ready to add headcount, consider interim consultants to fill the gap.
A Great Opportunity to Hire Talent
As the remainder of 2023 unfolds, we will continue to see a “rebalancing” of the job market. Enough time has passed since the days of The Great Resignation that many top players may be reconsidering previous moves they made based on big signing bonuses or flexible work arrangements that have since been shelved.
This is a great time for companies that value talent to begin to hire superstars who might not have been available previously or who made impulse jumps during the hottest days of the War for Talent. As you reassess your needs for 2023 and beyond, we’d love to help you build a best-in-class team.
C-suite executives must have the right data and information on the labor market and talent supply before making critical headcount decisions.