CEO MONTHLY / ISSUE 12 2022 21 Coping With Financial Uncertainty and Retaining Talent Will Be the Measure of Success for CEOs in 2023 The volatile global economy shows little sign of calming, and most economists agree that the next 12 months, at least, will be characterised by a global recession. How business leaders intend to define 2023 now is a likely indicator of the success of their businesses in the coming months and years. Many may choose to simply make do, but it is those leaders who embrace the reality of financial uncertainty and are proactive about retaining talent as an employer of choice who will weather the storm best next year. Recessions tend to breed uncertainty in terms of their impact and duration which often result in confused business strategies, particularly when leaders look to continue as normal. Perhaps the only positive feature of recessions is that there are two definites: the first is that there will be uncertainty, and the second is that recessions tend to be forecast, so leaders must make time to prepare for this. And the best place to start is with financial planning. The foundational brickwork to success starts with understanding your balance sheet and cash flows. A first recommendation for CEOs and business leaders is to invest evenmore time with your CFO and treasurers to understand where the cash flow sits, and where flexibility or financial support is required. At Taulia, we are seeing amajor uptick in people exploring cash flow acceleration solutions, which is enough to suggest that CEOs and businesses are already feeling the pinch ahead of 2023. If you are a CEO who fears the unknown, then consider arranging cash flow and credit facilities as a preemptive measure to alleviate these pressures. Expect the unexpected now so that you don’t regret being unable tomanoeuvre when agility is needed. Once you have enabled flexibility by securing cash flow and credit facilities, stress testing and scenario planning are critical next steps. Mapping best and worst-case scenarios for your customer base helps give you a picture of the measures that are needed to achieve success and can help you plan for steps that can help you to avoid the worst. This might cutting costs or, counterintuitively, investing in new talent, training or technologies that can streamline operations. Financial planning and scenario stress testing are not the only factors needed to be considered ahead of a recession. The labour market is unusually tight, globally, and has been for years . For this reason it remains set to be a critical battleground for businesses, but perhaps not for the reasons many think. The normal pattern of a recession is to see layoffs creating a loose labour market. This recession may look different, however, especially in some countries. The market might loosen, but in historical terms, the labour market could well remain tight. Under these circumstances, retaining and attracting motivated talent will remain as important during this downturn as it is under stable economic conditions. The opportunity here is to invest in remaining an employer or workplace of choice for top talent, regardless of what is happening outside your company’s purview. People make our businesses the positive, productive and creative places they are, so investing in our people will pay dividends. Nurturing your employees and understanding their values, the greater chance that your company will remain an employer of choice long after the dust settles. Retaining talent is something that we truly believe in at Taulia. We look at our culture as the glue to keep people together, in all business cycles, and move forward together. Our LIFT Program (Leadership Initiative for Taulia) is designed to equip our future leaders with the right skills to thrive and grow. This philosophy ensures that our high-potential leaders will possess the skills to achieve our company’s strategy, continue to grow our culture, and inspire other employees. We must not underestimate the importance of preparation for the unpredictable year ahead. While it’s certain that a recession is imminent, it is the events that emerge through the cracks that no one can prepare for. In light of this, the most integral choices that CEOs and business leaders can make are to implement excessive flexibility into their business plans and consider the financial facilities and products available that can aid balance sheets. There is an opportunity amongst this uncertainty for CEOs to really invest in their talent and highlight their value and worth. In a market where labour might be tight, foster a workplace environment that makes your business desirable to work in, for when market movement returns. Let’s not forget that some of the best products and companies were born during recessionary times. They were created by the pragmatic use of cash and the smart of talented people. Aug22240 Forward Feature
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