The benefits of economic turbulence and four trends that will impact business success

Is the glass half empty or half full? Looking at the global economy it could be argued that many were prematurely optimistic at the end of last year. Then again, perception is everything, as for some the looming downturn also presents a moment in time to refocus and realign your business and its priorities.

Bracing for economic turbulence

As we look towards the year ahead, business leaders need to be prepared for an economic outlook that may be more turbulent than expected. Over the past half-century, whenever inflation has reached an annual pace of more than 5%, it has taken a recession to wring inflation out of the economy.

According to Morgan Stanley, the equity risk premium is at its lowest since 2008. Equity risk premium is a long-term prediction of how much the stock market will outperform risk-free debt instruments. The Chair of the U.S. Federal Reserve Jerome Powell, has stated he won't pull back from his interest rate hikes until inflation gets closer to 2%. This will come as a disappointment to those who predicted we would begin 2023 on a surer economic footing, but it can also be viewed as a chance to streamline operations, address inefficiencies, and prioritise key areas for growth in order to come out ahead, while the economy recovers.

The battle for attracting and retaining talent

One key area business leaders need to focus on in the year ahead (and should always be doing) is selecting the right people for open roles. Despite projected growth slowing, finding new talent to deliver big projects will remain a challenge and one that can drive up costs. Achieving precision in this area requires alignment of the right people, with the necessary skills, who will be able to inspire the organisation every day - especially when times are tough. Motivating their teams to stay hungry and bring their best selves to their workplace. In addition, developing strategies to retain top talent will be even more important in 2023, and employers need to be ready to fight the competition and retain their best employees.

Being a destination company will matter more than ever

Another important area for business leaders to focus on is driving to become a destination company. Destination companies are those that great people seek out – “At some point, I really want to work there.” While it is still important, gone are the days of compensation being the only important factor for employees. Today's top talent are best motivated by purposeful work, a flexible work environment, professional development, and cultural alignment with their core values. According to a recent report by Ivanti, just 13% of office workers want to work in the office. Fostering a culture of flexibility has been found to create enormous opportunity as organisations embrace Everywhere Work. This is especially

important in light of the "Great Resignation" that has been taking place in recent years. Whether this trend continues in 2023 or not, business leaders should focus on fostering environments where employees can thrive.

Securing the work-from-anywhere environment

Aside from focusing on talent, business leaders will also need to pay attention to the technology trends that will gain more traction as the year progresses. For example, we can expect to see an increase in secure Internet of Things (IoT) devices. Analysts at Gartner predict there will be 43 billion IoT-connected devices across the globe in 2023, with cloud systems and networks that tie them all together evolving to meet cybersecurity needs.

Then there are the machine learning algorithms that will be able to examine the vast amounts of data moving across networks in real-time far more effectively than humanly possible, learning to recognise patterns that indicate a threat. According to IBM, companies that use AI and automation to detect and respond to data breaches save an average of $3 million compared to those that do not. Hand in hand, cybersecurity will be a key priority for businesses in 2023, to support remote working. Applications will be multifunctional, and businesses will focus more on digital employee experiences.

The evolution of remote working

When it comes to working from home, people and companies found their footing in 2022. As remote working continues to evolve, we can expect to see more people empowered to work from anywhere and find fulfilment in both their personal and professional lives due to increased flexibility in working arrangements. Part of this will mean regular re-evaluation and redefining of what is important, under an umbrella of shared values. Underpinning this will be the employees hired shortly before the pandemic who are moving into more senior positions over the course of the year, bringing with them new values and perspectives into the workforce.

The economic uncertainty on the horizon presents an opportunity for business leaders to clean house, tighten up loose areas and narrow focus – with the future rewards of clearer skies. And as the economy improves, focus on precision, alignment with the right people, embracing growing technology trends, and creating destination companies where employees can thrive, will be what separates the leaders from the laggards.