UK CEOs plan to retain essential talent while managing down profit to support staff and customers through recession

• UK leaders more pessimistic than European counterparts on the length of the recession
• Talent retention is seen as key to survival, with half of UK CEOs planning to manage down profits to minimize the impact of recession on employees and customers 
• 75% of UK leaders see investment in sustainability as part of their recession strategy

London, December 15th – UK CEOs are preparing to prioritise their critical talent over short-term profit as they prepare for a lengthy recession, according to leadership advisory firm Russell Reynolds Associates.

The firm’s Q4 2022 Global Leadership Monitor tracks the views of global CEOs, board members and next generation leaders. The data reveals that UK leaders are more pessimistic about the economic outlook than their EU counterparts: 45% anticipate a recession will last 12 months or more, compared with 30% in the US, 33% globally and 42% in Europe.

Talent retention is seen as the most important factor in preparing for the economic downturn. Almost all (96%) UK leaders surveyed say retaining critical talent is an important part of their response to the recession, closely followed by investing in digital technology (91%).

Furthermore, almost half (48%) of UK CEOs** say they are likely to manage down profitability levels should they experience a notable fall in revenue or increase in input costs so as to minimize the impact on their employees and customers, despite pressures from investors and shareholders.

The UK is relatively unusual, however, for the extent to which sustainability is seen as key to navigating the recession. Three quarters (75%) of UK leaders say that investing in sustainability is an important part of their recession response, compared to just 53% worldwide. Confidence in the ability of UK boards to find opportunities in the transition is also high with 70% of UK leaders saying this compared to 56% worldwide.

“Our latest research shows that despite acknowledgement of the potential for workforce reductions, almost all UK leaders are placing essential talent at the forefront of their recession planning decisions,” said Laura Sanderson, Russell Reynolds Associates UK Country Manager and co-lead of the board & CEO practice in Europe for Russell Reynolds Associates. “Despite the less optimistic view of the future than US and European counterparts, the UK’s commitment to sustainability shows how the UK’s business leaders remain confident in their ability to identify and capitalise on opportunities in an ever-changing environment."

Despite recessionary challenges, the report also reveals that UK boards are ahead of their counterparts in progressing their diversity agenda. UK business leaders are more confident in the ability of the board to improve diversity, equity, and inclusion, with the figure at 66% in the UK, compared to 57% globally and 59% in Europe.

_{* “UK leaders” refers to responses from 47 next generation leaders, 73 board members, 70 C-suite leaders and 34 CEOs.
** In the UK 28 CEOs were surveyed.}