Companies are now hiring more selectively, survey finds

As more companies accept the new realities of flexible working environments, many are leaning into the benefits of streamlined, partially or wholly remote positions staffed by skilled workers.

“The most significant change reported by Chief Human Resources Officers of the past six months has been a shift in the nature of remote, hybrid and in-person workers: Companies are pulling back on hiring,” according to the latest PwC Pulse Survey of CHROs.

Among the key survey findings:

Power dynamics are shifting back toward employers. Companies are focused on making sure they are not just hiring people but hiring the right people. Eighty-three percent of CHROs say their companies are considering or already have reduced overall head count. The labor market is showing signs of returning to a more familiar state.

Looking forward, CHROs see the recent shift in the labor market continuing. Almost half say it’s likely that voluntary turnover will return to the pre-pandemic rate in the next 12 months. Even more (53%) say it’s likely that the labor market will shift to favor employers over employees in the next 12 months.

CHROs are reassessing their workforce policies. From compensation packages to vaccine mandates, HR executives are starting to make changes. Thirty-eight percent report that they recently have increased employee compensation. Many are pulling back when it comes to dramatic compensation increases like those seen during the Great Resignation. CHROs also are significantly more likely than other executives to consider cost-saving measure such as hiring freezes, rescinding job offers and lowering or dropping signing bonuses.

Flexibility is here to stay. Investments in providing employees with choice and flexibility in where and when they work — and the wellbeing resources to maintain that flexibility — remain a leading priority. More than 8 in 10 CHROs are working on expanding permanent remote work.

Nearly 40% say they already have made remote work permanent where possible, up from the 29% who said the same in January. Expanding remote work options means many CHROs are able to decrease their real estate footprint and save money, and 65% of those surveyed say they will maintain or decrease their real estate investments over the next 12 months.

Transportation woes and employee backlash top return-to-office challenges. Employers may want workers to go back to the office, but many can’t — or may not want to. Thirty-one percent of CHROs say transportation issues are a top concern when returning to in-person work.

Related: CHROs should embrace a fluid mindset at work

Nearly 1 in 4 executives are concerned about remote workers being treated differently than in-person employees. Other concerns — such as maintaining a fully stocked and staffed office, the availability of dependent care and on-site safety of employees — also are on the minds of CHROs.

“In spite of increased job creation and declining unemployment, many companies are looking to strategically manage head count to help navigate shifting economic headwinds,” the survey report says. “Maintaining strategic workforce investments while pulling back on overall spending shows a clear switch from a reactive to a proactive policy.”