CHROs are lowering their business forecasts for the year ahead of “persistent inflation and talent challenges” that seem to be lasting longer than anticipated, according to the latest CHRO Confidence Index from StrategicCHRO360.
The index retracted nearly 3% between the current quarter and the last as CHROs prepare for a longer than expected path to economic recovery. Overall, the index found that 35% of respondents expect conditions to improve over the next 12 months, and only 20% expect them to be worse in April 2024. Meanwhile, 46% don’t expect much change at all over the next 12-month period.
The company said its CHRO forecast is rooted in what the executives see as a slower-than-anticipated turnaround of the economy and how that will translate for organizations, as opposed to doubt of recovery. Many respondents said that although they face economic issues, they are still experiencing strong growth and demand.
Revenue, Wages and More
The Confidence Index found that fewer CHROs expect an increase in profits over the next year. However, the forecast for revenues remained mostly the same, with expected growth dropping only by one percentage point.
At the same time, StrategicCHRO360 saw that fewer CHROs this quarter said they expected wages and the overall cost of labor to continue to increase over the next 12 months, at 76% and 84% respectively, compared to 86% for both measures last quarter.
Over the course of the next year, about 58% of CHROs still anticipate an increase in headcount. However, the proportion of those expecting to pause — or even cut — their workforce-related investments went up in as well during the quarter. Currently, 9% of the CHRO respondents expect to cut back as opposed to the 4% that was reported in January. Some 32% said they’re not planning on making many changes.