CHRO Business Outlook: CHROs Expect Fair Condition Ahead

You can sum up CHROs’ feelings in a word: “fair.” Most of them believe the current economic and employment conditions, as well as six-month forecasts, are neither positive nor negative, but fair.

• Inflation remains top-of-mind, as CHROs with negative outlooks point to wages’ inability to keep up with recent inflation, even as higher labor costs impact their organizations’ bottom lines. The more optimistic CHROs among those projecting fair conditions see signs of interest rates, prices, and inflation stabilizing, but they do not expect marked improvement in the near term.
• The 2024 U.S. election is causing jitters. A few optimists believe the economy is likely to improve in an election year, while others expect that political divisiveness and government ineffectiveness will hinder meaningful improvements to the country’s economic and employment conditions. Geopolitical instability is another rising concern this quarter, due to uncertainty about the potential impact of conflicts in the Middle East and Ukraine.
• There are hints of a softening labor market. Although talent competition remains stiff in some professions, several CHROs report that wage stabilization and declining job openings are increasing retention rates in their organizations. Managerial and executive-level positions are the hardest to fill. CHROs project small increases in full-time headcounts and total rewards budgets, while other indicators remain stable.

Most CHROs project that revenue, profits, and capital investments will all see minor increases, except in the service industry, reflecting optimism about stable economic conditions.