Number of the Week: 93%

The Conference Board Measure of CEO Confidence™, in collaboration with The Business Council, declined for the fifth consecutive quarter in Q3 2022, reaching lows not seen since the COVID-19 pandemic’s onset in 2020. Asked to describe the economic conditions they are preparing to face over the next 12-18 months, nearly all CEOs — 93 percent — anticipate some sort of recession. Indeed, 81 percent said they expect a US downturn to be brief and shallow, with limited global spillover, while 12 percent anticipate a deep recession, with global spillover.

Why It Matters For business leaders and economists alike, a recession now seems increasingly inevitable by the end of this year or in 2023. Yet, this shouldn’t necessarily imply a protracted and severe shock ahead. In fact, many conditions reported by CEOs in Q3 complicate the picture typically associated with serious economic contractions. For instance, three-quarters say demand has risen or held steady over the past three months. Additionally, 50 percent say they intend to continue expanding their workforce and increasing wages in the year ahead. And, while down from the Q2 reading of 80 percent, 73 percent still report some problems attracting qualified workers in Q3—a sign that historically tight US labor markets are still holding up against the recession threat.

Read the results »

PayPal’s CEO Talks Profit and Purpose, and Improving Workers’ Financial Well-Being

Why profit and purpose intersect, and the role of business in improving workers’ financial security, were key themes in an interview with Dan Schulman, President and CEO of PayPal, and Dr. Lori Esposito Murray, President of the Committee for Economic Development, the public policy center of The Conference Board (CED). As Schulman discussed, elevated worker turnover and burnout compelled PayPal to conduct an analysis that determined the net disposable income (NDI) of its employees. The concerning results spurred the company into making significant additional investments in its staff.

Why It Matters When a company has satisfied, motivated employees, often the customer experience and product improve, as does overall company performance. Schulman found that employees were motivated by the company’s mission and purpose of democratizing financial services and enabling small businesses to thrive in a digital economy. This motivation, coupled with PayPal making all workers shareholders and investing millions of additional dollars into its staff to lower healthcare costs and increase salaries and wages, helped enable workers to perform at their highest level. 

Dan Schulman is a 2022 CED Distinguished Leadership Awards recipient.

Listen to or watch the conversation »

41 Percent of Workers Believe We're Already in a Recession

Amid debate about whether the US is in a recession, a new survey from The Conference Board Human Capital Center reveals 41 percent of workers believe we are. Indeed, workers say their companies are already taking precautionary measures, with 36 percent reporting their company has begun restricting hiring to crucial roles, and 13 percent saying layoffs have been conducted. Workers aren’t worried, however, with 80 percent feeling secure in their jobs.

Why It Matters “Amid historically low unemployment in the US, this recession will be significantly different from prior downturns,” said Rebecca Ray, PhD, Executive Vice President of Human Capital at The Conference Board. “Businesses should be mindful of the lessons learned from the COVID recession, when those that furloughed or laid off workers saw just how hard it can be to get that talent back. As we face another recession—which The Conference Board projects will begin later this year—leaders should explore alternatives to layoffs and furloughs, such as offering incentives for voluntary separation.”

Read the results »

Explore the Global Recession Hub

The Global Recession hub is your indispensable, 360° guide for navigating the economic storm—and emerging stronger on the other side. 

Making Sense of the 2022 Proxy Season to Set Priorities for 2023

The 2022 proxy season sent mixed messages to companies: The number of shareholder proposals on environmental and social topics reached a record level, but the average support for these proposals declined. That’s because emboldened shareholder proponents were less discerning, while mainstream investors became more so. Many shareholder proposals were of lower quality, less relevant to the company’s business, supported by weaker rationales, or targeted at companies where they would have little chance of passing.

In separating the wheat from the chaff, major investors supported mainstream proposals in a few key areas, including those related to racial equity and civil rights audits, GHG emissions across the value chain, and political contributions and lobbying. 

The Path Forward As the SEC plans to open the door even wider for shareholder proposals, expect the flood of ESG proposals to continue into 2023. Boards should not view a rising number of proposals as a signal that they are necessarily doing something “wrong.” Moreover, boards will need to prioritize, devoting more attention to proposals relevant to their business and that garnered significant support at comparable companies, and less to proposals that seem to have been submitted as a matter of grandstanding.

Watch the on-demand webcast »

Marketers Should Be Economists, Too

The economy is the stage on which all the stories from your marketing and communications teams play out. As plans begin to coalesce for the fourth quarter, economic indicators from The Conference Board provide insights for your leaders to deal with the turbulence ahead. 

Why It Matters In July, we saw the fifth successive month of decline in the Leading Economic Index (LEI), which presages the coming recession. Continued inflation and expected interest rate rises—and the pressure that puts on households as winter looms—will put a chill into the optimism of your teams. One other factor to consider is that retail sales in July flattened; dropping gasoline prices granted consumers some reprieve from inflation.

However, the net effect on spending was muted as inflation in other parts of the economy continued eating away at purchasing power. 81 percent of CEOs in The Conference Board Measure of CEO Confidence™ expect a shallow and brief recession. Those who are brave and continue to invest in brands, sustainability, and digital transformation will reap rewards. You should be confident that your teams are tracking this data and creating their plans accordingly.

Learn more about the Marketing & Communications Center »

QUOTABLE

“What I see in our world right now is the increasing importance of resilience...The resilience of human communities to survive catastrophes, droughts, and conflict. It's the resilience of nature and how we use it.” 

— Carter Roberts, President and CEO of the World Wildlife Fund, in a new episode of CEO Perspectives on the sustainability of the world’s food systems.