PwC Pulse Survey: Managing business risks

Read time: 10 minutes

  • %

    of executives are focusing business strategy on growth

  • %

    Cyber #1 business risk, with 40% citing it as a serious risk

  • %

    are changing processes to address labor shortages

In our second Pulse Survey of 2022, business leaders point to a wide range of challenges in the current environment, even as they take proactive steps to respond.

Key findings include:

  • Business leaders are cautiously optimistic about their future prospects. More than four-fifths (83%) are focusing the business strategy on growth — more than any other objective. And only 30% see recession as a serious risk.
  • Executives cite acquiring and retaining talent as a serious risk. Yet even as companies fret about human capital, in particular the need for people with the skills to help them grow, they’re taking steps to streamline the workforce.
  • Cyber is the No. 1 business risk, with 40% of all respondents listing more frequent and/or broader cyber attacks as a serious risk (and another 38% calling it a moderate risk). Cyber threats are no longer solely the domain of the CISO.
  • While companies continue to invest in many areas of the business, they’re scaling back the most in real estate and capex. After two years of remote work, many companies simply need less space, and they’re allocating capital accordingly.
  • As the yardstick for company performance expands beyond financial metrics, companies have an imperative to build trust and transparency among their stakeholders. Almost two thirds (65%) of executives tell us they’re focused on developing or refining their trust strategy.
  • Tested by the pandemic, business executives are now more prepared for the future, and 69% of respondents say that they’re referring to a lessons-learned playbook developed out of COVID-19.

Cautious optimism

Despite a wide range of business risks and mixed economic signals, companies remain focused on growth.


of companies are focusing their business strategy on growth, more than any other objective.

Business executives are cautiously optimistic despite a challenging business environment

Executives cite a long list of business issues as serious risks to their companies. Cyber tops the list, with 40% citing more frequent and/or broader cyber risks as a serious risk. Talent acquisition and retention (38%) and rising production costs (34%) are close behind.

Among the less-frequently-cited risks were geopolitical factors like US-China relations (27% of respondents consider this a serious risk), a prolonged conflict in Ukraine (22%) and US societal unrest (17%). Recession was also well down on the list of business risks (only 30% consider it a serious risk, despite 60% of executives saying a recession is likely in the next year).

This comes as some economic data indicates signs of improvement. The unemployment rate, for instance, edged down to 3.5%. Inflation, while still high, showed some signs of stabilizing in July. This slight shift is also reflected in our survey, with 62% of executives now saying it's likely that inflation will remain elevated for the next 12 months, down from 69% in January. As a result, executives may be shifting from an active concern about the business environment to focusing on growth. Climate change was also low (23% consider it a serious risk), even with the growing emphasis on environmental sustainability at most companies.

Managing business risks Managing business risks

Managing business risks Managing business risks

Despite these risks, business leaders see bright spots. When asked how they are responding to the current business environment, 83% say they’re focusing their business strategy on growth. This is somewhat surprising given the mixed signals in the economy right now, including rising interest rates and slowing economic growth. After more than two years dealing with uncertainty related to the pandemic, business leaders recognize the urgent need to focus on growth in order to compete, and they’re zeroing in on what they can control.

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With growth in mind, executives are exploring both acquisitions and increases in internal investment. Seventy percent tell us they’re considering an acquisition as a result of the current business environment. Internally, they’re increasing investments in digital transformation (53%), IT (52%), cybersecurity and privacy (49%) and customer experience (48%). Many of these investment areas can help improve efficiency and scalability and introduce new technology to boost productivity as companies continue to deal with talent shortages.

What your company can do

  • Lean into growth even amid uncertainty. Focusing on your growth agenda will be key to competing. Pay close attention to the changes and trends that may impact your business and assess which ones you can plan for. Success is more than solely managing costs and risks. For example, you may need to change products, services or pricing — all of which drive growth.
  • Take a hard look at all parts of your portfolio and where you can optimize. Position it to drive both operational excellence and growth. 
  • Consider whether an acquisition would help you get the talent you need. The recent rise in interest rates has slowed deal activity, but dealmaking should always be an option — and some prices have come down.
  • Don’t try to do too many things. Focus on the areas that free up the most dollars with the least amount of pain. Then look for value creation opportunities for your investments. Rather than expanding your investments in digital technologies broadly, for example, focus on those that drive productivity.

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Despite concerns about their ability to hire and retain the right talent, some companies are starting to streamline their workforce.


of respondents are reducing their overall headcount, even as business leaders remain concerned about hiring and retaining talent.

Walking a tightrope on talent

Nearly two-thirds of businesses (63%) have changed or are planning to change processes to address labor shortages, up from 56% in January 2022. Ironically, as businesses pivot even more toward automation, it’s critical to find employees with the right combination of deep functional knowledge and technology know-how. Without the right talent, automations can fail to deliver on promised efficiencies and increase operational risk.

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Finding the right talent continues to be a challenge for business leaders. Talent acquisition came in second as a risk behind cyber, with 38% of respondents citing it as a serious risk. Companies continue to look for and attract new talent in creative ways, including:

  • Expanding remote work options for roles that allow: A large majority (70%) of respondents say they have either implemented this or have a plan in place. 

  • Pursuing acquisitions to gain access to talent: About half (52%) of executives say they’re considering an acquisition to gain access to needed talent.

  • Customizing their HR strategy by employee type: 59% either have a plan to do this or have implemented one.

At the same time, respondents are also taking proactive steps to streamline the workforce and establish the appropriate mix of worker skills for the future. This comes as no surprise. After a frenzy of hiring and a tight labor market over the past few years, executives see the distinction between having people and having people with the right skills. For example, 50% of all respondents are reducing their overall headcount, 46% are dropping or reducing signing bonuses and 44% are rescinding offers.

We see these precautionary actions more in certain industries. Consumer markets and technology, media and telecommunications companies, for example, are more likely to invest in automation to address labor shortages. At the same time, healthcare is seeing bigger talent challenges than other industries and is more focused on rehiring employees who have recently left.

What your company can do

  • Analyze your strategic workforce needs to understand both the skills and capabilities required today as well as those that will be needed to execute your company’s future strategic initiatives. Customize your HR strategy based on the employee type you need to grow.

  • For each component of your people experience (e.g., recruiting and performance management), consider what changes you might need to make to drive the right culture, experience and outcomes.

  • Use performance management tools that use data to assess how employees and managers are doing — especially given the shift to hybrid work where in-person oversight is less common.

  • Conduct periodic culture assessments to help assess and create an inclusive environment even as the talent profile of the organization changes. In particular, avoid a “two-tiered” organization in which in-person and remote workers are treated differently. Balance your automation efforts with both your talent needs and what you want your company culture to be.

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Cybersecurity and threats

Growing cyber threats and a greater reliance on data in business models mean that cybersecurity is now a central responsibility for the entire C-suite and board.


of executives cite cyber attacks as a serious risk — the top business risk companies are facing

Cybersecurity is now on the agenda of the entire C-suite

Cybersecurity is becoming an enterprisewide issue, beyond the CISO’s office. Cyber attacks top the list of business risks, with 40% of all respondents listing it as a serious risk (and another 38% citing it as a moderate risk). Virtually all roles ranked cyber attacks high on their list of risks, including tax leaders (with 47% citing it as a serious risk), CFOs (44%) and CMOs (41%).

An even bigger signal of the growing concern around cyber is that 51% of board members cited it as a serious risk (and another 35% as a moderate risk) — more than any other category of business leader. In March 2022, the SEC proposed to enhance and standardize cybersecurity disclosures, requiring that the registrant’s board of directors oversee cybersecurity risk. The proposal would also require annual reporting or certain proxy disclosure about the board of directors’ cybersecurity expertise. As a result, board members are becoming increasingly attuned to cyber threats and their role in overseeing cybersecurity risk management.

Cybersecurity — including the related realms of privacy and data protection — is also becoming a growing policy concern of business leaders. Not surprisingly, 84% say they’re either monitoring closely or taking action on potential regulatory changes. 

The importance of cyber reflects two things. First, virtually all companies are now digital companies, with a heavy reliance on data and analytics and a growing reliance on mobile and cloud. Second, cyber threats continue to grow and become more sophisticated.

What your company can do

  • View cybersecurity as a broad business concern and not just an IT issue. Build cybersecurity and data privacy into agendas across the C-suite and board. Increase investment to improve security

  • Educate your employees on effective cybersecurity practices. 

  • For each new business initiative or transformation, make sure there’s a cyber plan in place.

  • Use data and intelligence to regularly measure your cyber risks. Proactively look for blind spots in your third-party relationships and supply chains.

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Investment changes reflect new ways of working

Investments in real estate are declining more than any other area of the business — likely a response to hybrid and remote work.


of companies are scaling back their investment in real estate, more than any other business area.

Companies rethink their investments

As the trend for hybrid and remote work continues, companies are reassessing their physical office footprint with some deciding that less is more. Most (70%) have either expanded or have plans to expand permanent remote work options for job roles that allow. In fact, 42% have already implemented such measures — up from 30% in our January Pulse survey.

Only 31% of respondents plan to increase their investment in real estate, and 22% plan to decrease their investment (a higher decrease than any other investment area). Financial services and health industries are leading the way, with 30% and 29%, respectively, decreasing investments in real estate. Similarly, 15% of overall respondents say they will decrease their investment in facilities and general capex over the next 12 months. When a large swath of workers is no longer in the office on a regular basis, companies can significantly downscale their physical footprint.

On the other hand, executives are making investments in areas that will help drive growth. About half are increasing investments in digital transformation (53%), IT (52%) and cybersecurity and privacy (49%). Forty-eight percent are increasing investment in customer experience and 40% are putting more dollars toward research and development.

What your company can do

  • Align your investment plan with your company’s strategic direction. Make multi-year investments to drive both short- and long-term outcomes.

  • Embed clear return on investment expectations in the budget for every investment you make. Disciplined leaders are taking a very honest look at every part of their business.

  • Determine where your company wants to go with ways of working and how to most effectively optimize your talent, real estate and technology strategies to enable that plan.

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As businesses grapple with risk and uncertainty, building and maintaining trust is key.


of respondents say they are focused on developing and/or refining their trust strategy.

The trust imperative

Trust is increasingly becoming a source of competitive advantage for companies that treat it as such — and a point of failure for companies that don’t. In our current survey, 42% of executives say businesses will be the most trusted entity in the next 12 months — up from 39% in January 2022. Executives are doubling down, with 65% saying they’re focused on developing and/or refining their trust strategy. 

As the yardstick for company performance expands beyond financial metrics, companies have an imperative to build trust and transparency among different stakeholder groups — employees, customers, suppliers, regulators and the communities in which they operate. This includes both doing the right things and communicating clearly on topics such as reporting and tax transparency.

One third (32%) of business executives tell us they’re very agile when changing business strategy to address stakeholder demands for transparency. That may not seem high in absolute terms, but it was second-highest among all responses regarding agility. 

As companies respond to an ever-shifting landscape of risks, challenges and even crises, trust creates a multiplier effect — both positive and negative. Organizations that have cultivated trust as an asset and built up a reservoir of goodwill have more latitude in their response. Conversely, companies with a deficiency of trust make challenges that much tougher on themselves.

What your company can do

  • Identify the areas of your business that most significantly determine your ability to build (or lose) trust, including cybersecurity, supply chain and communications. Work with your teams to embed trust in those processes.

  • Trust can’t be limited to certain functions or business units. It needs to be an integral part of your organization’s DNA. 

  • Educate your leadership teams on their role in building trust and identifying areas where trust can be impaired. Senior executives should be consistent in aligning words to actions. Be visible and transparent with all stakeholders about your company’s plans for the future. If you’re considering actions such as rescinding offers, for instance, make sure you’re paying close attention to the potential impact on your reputation as an employer.

  • Create or refine your stakeholder plan, including your communication cadence for bringing each stakeholder along on your strategic journey. It’s critical to help your stakeholders understand the why. Set up listening channels to understand how stakeholders feel about your organization.

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Pandemic lessons learned

Executives should take the time to reflect on their experiences of the past few years.


of respondents say they’re referring to a lessons-learned playbook developed out of COVID-19.

Tested by the pandemic, business executives feel more prepared for the future

If there’s a bright spot to the upheavals we’ve been experiencing over the past several years, it’s that companies and their leaders have become far more agile in how they respond. By the time executives could implement the changes they had scrambled to develop, something else would shift, causing the need for more changes. This time compression is forcing faster response times and, as a result, three- to five-year strategies can no longer be the go-to.

For manufacturers and other types of companies with long supply chains, many pivoted away from global just-in-time manufacturing after experiencing critical shortages due to production issues. Problem is, the processes were developed and used over decades because they were incredibly cost efficient. Smart executives are now reflecting on which investments made in response to the pandemic should be kept and which should be wound down.

Risks are also now more interconnected as well. The following examples highlight how business changes can result in new risks:

  • While heroic shifts to remote work happened overnight in early 2020, cybersecurity risks soared as employees were logging in from home. 

  • We’re now seeing companies settle on hybrid work models, with some employees working remotely all the time, some splitting their time between home and office and others working exclusively on-site. While this leads to added flexibility and allows companies to hire from a larger pool of employees, it also creates the potential for inequitable treatment of remote workers compared to in-office workers. In fact, 29% of CHROs say that finding a balance between in-office, remote and hybrid work will present a top-3 workforce-related concern for the next 12 months.

  • As companies continue to automate processes due to labor shortages, many are finding that they don’t have the talent they need. Without the right talent, automations can fail to deliver on promised efficiencies and increase operational risk.

What your company can do

  • Conduct a lessons-learned exercise to explore how your company fared over the past few years. Do a gut check on any of the countermeasures you took as a result of the pandemic. Consider all aspects of your business, from supply chain to management to people to tax to systems. Make sure you involve the right people.
  • Collaborate closely across the leadership team as you develop go-forward plans. Aligned leadership teams that connect dots are critical to driving effective execution. 
  • Consider business partners and the idea of an ecosystem mentality. Business partners can help free up resources.
  • Revisit the models that your company uses to drive decisions. Many models do not include consideration of new risks that can materially impact your business. For example, how will increasing political polarization impact your revenue goals? Bring all voices to the table to help develop new ideas and ways to drive growth and build trust.

This won’t be the last unusual business experience you face. Avoid the temptation to rush to consider how to emerge stronger.

Sector implications

Health executives see cyber attacks, supply chain, tax policy as top business risks

Cyber attacks top the list of risks for health industries. Forty-three percent of health industries executives cite cyber attacks as a serious risk to their organization, compared to 40% of respondents overall. Amid the rising threat of data breaches, ransomware attacks and leaking of sensitive patient data, companies increasingly are using technology in real-time detection and defense. Almost one quarter of health industry executives tell us they’re already seeing benefits from using artificial intelligence in cyber defense.

These executives also rank supply chain disruptions and tax policy as more serious business risks than other sector leaders, with 41% citing these risks compared to 34% and 28% of other respondents, respectively. Pharmaceutical and life sciences companies in particular should develop strategies to prepare for the tax implications of the Inflation Reduction Act, which contains provisions aimed at lowering the cost of prescription drugs and health insurance.

Rising production costs (37%) and talent acquisition and retention (31%) rounded out the top five most serious business risks for health industries. Our January 2022 PwC Pulse Survey found health industry executives already grappling with staffing shortages and the risks COVID-19 variants pose to growth. We expect payer, provider and pharmaceutical and life sciences executives to continue preparing for those risks, along with the potential for recession as we move further into the inflation cycle.

Looking ahead to the next 12 months, health industries leaders are increasing their investments in IT (59%), digital transformation (57%) and cybersecurity and privacy (57%). Those are smart investments as digitally connected health ecosystems emerge for health services organizations and pharmaceutical and life sciences companies use digital technologies to become more consumer-centric. Health industries respondents are also more likely to say that they’re increasing investments in R&D and innovation in the next 12 months (51% versus 40% overall).

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Awaiting a recession, FS leaders still seek talent

Financial services (FS) respondents are more bearish on the economy than their counterparts in other industries. Seventy percent tell us they think a recession is likely in the next 12 months, compared to 60% overall. Moreover, a full third (33%) of FS respondents — tied with respondents in industrial products — consider recession a serious risk, the highest among all industries. Despite these concerns, FS executives say they’ll continue investing in certain key areas over the next year. Sixty percent plan to increase spending on digital transformation (compared to 53% overall) and 56% say they’ll raise expenditures on customer experience (versus 48% overall). 

FS respondents also see talent acquisition and retention as a potentially bigger pitfall than anyone else. Forty-four percent say it’s a serious risk (versus 38% overall). In response, the sector is among the most likely to offer flexible work options, with 68% saying they’ve expanded remote work choice where possible or plan to do so, and only 27% say they’ve implemented a plan for having employees on-site more often (compared to 32% overall). In addition, FS is least likely to reduce headcount, with 36% of respondents saying they have no plans to do so. Perhaps as a result of these workforce policies, 30% of FS executives say they plan to cut investments in real estate over the next year, the most in any industry.

Interestingly, and in contrast to the above, only 38% of FS respondents indicate their companies will increase investments in the workforce, the lowest figure among all industries. Also of note, 31% of FS respondents, eight percentage points more than the average, report that their companies have no plans to make acquisitions to acquire talent. This indicates that most of them will make do with existing investments and develop needed skills on their own.

For US manufacturers, inflation, supply chain woes beg greater agility

While industrial products (IP) sector leaders still grapple with supply chain disruptions and labor shortages, they’re also being hit by the double-whammy of inflation and the specter of a recession, making agility ever more important. Due to these and other pressures on the sector, US manufacturing output contracted in both May and June. However, looking ahead, the Inflation Reduction Act and the CHIPS and Science Act may have important, positive implications.

Nearly three in four sector leaders (73%) cite rising production costs (e.g., wages, materials, energy, inventory) as posing a “moderate or serious” risk to their business. As a result, even more leaders (77%) say they’re increasing prices for products and services. Meanwhile, most IP executives (57%) report that their businesses are streamlining their product portfolios in the face of the challenging current environment presumably in order to protect shrinking margins.

The sector continues to be beleaguered by supply chain woes, with 71% saying they pose either a moderate or serious risk to their business. Still, yet, nearly as many, (75%) report that they’re improving supply chain resiliency. Looking ahead, 45% of sector leaders believe that supply chain disruptions will ease in the next year.

Workforce issues, too, are still a pain point, with 77% of respondents agreeing that problems surrounding talent acquisition and retention pose risks to their business. IP executives are expanding permanent remote work options for roles that allow for it (64%) and increased compensation for existing employees (retention bonuses, off-cycle raises). Despite the challenging workforce environment, most IP leaders (69%) describe their businesses as “very or moderately” agile in responding to the shifts in the workforce and in attracting talent. Efforts underway may be paying dividends, as payrolls in US manufacturing rose unexpectedly by 30,000 jobs in July 2022.

Given the recent spike in cyber attacks on the industry, 75% of IP executives say that more frequent and/or broader attacks are either a moderate or serious risk to their companies. A vast majority (82%) say they’re taking action or closely monitoring policy around cybersecurity, privacy and data protection, and 76% are revising or enhancing their cyber risk management. Most IP sector leaders (73%) describe their companies as “very or moderately” agile in the changing cyber environment.

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Investing for the future in uncertain times

Consumer-facing companies are more likely than their peers to expect a dip in earnings in 2022 due to a confluence of business risks ranging from supply chain issues and inflation to geopolitical concerns and residual COVID-19 considerations. 

In response, nearly two-thirds (65%) of consumer markets (CM) leaders have cut earnings forecasts (versus 58% for all sectors), 62% are reducing prices (versus 50% overall) and 58% (versus 52%) have either instituted hiring freezes or plan to do so. 

Close to half of CM leaders (44%) tell us supply chain disruptions pose a serious risk to their business (versus 34% for all sectors). Most (77%) plan to digitize their supply chains for resilience and flexibility. Rising production costs are also top of mind as is the role of inflation in depressing consumer demand. 

As consumers focus on necessities such as food and gas, CM executives are contending with unsold inventory and increasingly scarce warehouse space. Meanwhile, longer lead times stemming from supply chain disruption have further complicated the balance of supply and demand, exacerbating already shifting consumer preferences

Despite these headwinds, CM companies are charting future moves. Almost 60% report increasing investments in both tech and digital transformation. CM leaders also expect to invest more in operations (51% versus 41% overall), R&D (48% versus 40%) and ESG initiatives (52% versus 45%). 

Their focus on tech-enabled innovation acknowledges that consumers reward companies for a seamless, one-of-kind customer experience with a business they can trust and whose values they identify with. To that end, CM leaders are closely monitoring policy developments in cybersecurity, data protection and privacy. 

Most CM companies (71%) are expanding permanent remote work opportunities, as roles allow, and 70% (versus 63% overall) are introducing automation to address labor shortages. Meanwhile, 68% (versus 59% overall) are customizing their HR strategy to meet employee needs in various roles. CM leaders’ commitment to growth signals their vision of an agenda for the future that they can navigate, regardless of current uncertainty and unforeseen disruptions.

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Talent in flux: Preparing for growth as recession risk rises

The talent paradox is real. Forty percent of the technology, media and telecommunications (TMT) leaders who responded to our Pulse Survey ranked talent acquisition and retention as a serious risk to their companies. Yet TMT leaders were more likely than their peers to reduce employee headcount (58%), implement hiring freezes (58%), lower or eliminate signing bonuses (57%) or rescind job offers (49%).

The Pulse Survey comes as TMT companies recalibrate following a pendulum swing from pandemic boom to economic slowdown. But even as inflation and recession fears roil the markets, 88% of TMT leaders reported that they’re focusing their business strategies on growth. These findings dovetail with PwC’s recent Global Entertainment & Media Outlook, which describes how priorities have shifted as the sector emerged transformed by a period of social upheaval. 

Identifying and capitalizing on growth alternatives may be essential to remaining competitive in today’s economic environment. Companies nimble enough to pivot to new growth opportunities may require a plan to cultivate talent well-suited to this moment. That may mean a smaller workforce, but one that’s more focused on new areas of development. Incentivizing current and recent employees may be key in this effort.

TMT companies were more likely to have increased compensation for existing employees (70% versus 64% overall). For roles that allow it, 81% of TMT leaders report that they have expanded or plan to expand remote work options (versus 70% for all sectors). They’re also more likely than their peers to encourage employees who recently left to return (58% versus 49% overall), potentially reducing the time necessary for onboarding and training.

Bold ambitions for energy and utilities in a world of amplified risks

Energy and utilities executives have bold ambitions for the future along with very real, present-day obligations. It’s a balancing act playing out amid a backdrop of emerging threats, economic uncertainty and rising costs as well as societal, political and regulatory pressures. Sector leaders feel the weight of this, citing cyber attacks, high US interest rates, supply chain disruptions, climate change, the US regulatory environment and tax policy changes as serious risks facing their companies. Notably, industry respondents rank these risks higher than executives overall.

The risks may feel amplified, and for good reason. Leaders are balancing the growing demand for net-zero sources of energy with the realities of today’s energy supply. Many cleaner energy initiatives hinge on the ability to procure solar panels and other materials including critical minerals. Meanwhile, new and evolving threats to grids, pipelines and energy infrastructure emerge daily.  

With the important task of protecting the nation’s energy supply, it’s increasingly important to make cybersecurity everyone’s priority. Energy and utilities executives are aligned on the need to revise and enhance cyber risk management, naming it as the top action (84%) the industry is taking in response to today’s business environment. Executives are also looking to invest in cybersecurity, with 59% planning to increase investments in the next 12 months, the top area for investment. IT, digital transformation, customer experience and ESG round out the top five areas for investment.

Trust is top of mind for energy and utilities executives. At a level much higher than other industries, 63% of energy and utilities expect business to be the most trusted entity in the next 12 months. More than half (53%) plan to proactively become more transparent with all stakeholders. This includes taking action to address or monitor proposed SEC climate disclosure rules, one of the top policy areas on their radars. The adoption of investor-grade climate and emissions reporting is one step in a bigger effort that’s underway. It also includes operationalizing ESG commitments, embedding ESG in business strategy and pursuing opportunities to lead the march toward a cleaner energy future.

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Threats and talent top risks for private companies

Private companies are playing catch-up to public companies, as many delayed investments and deferred maintenance over the past few years. They’re also squarely focused on growth and the aspects of business that directly tie to the bottom line.

The vast majority of private company respondents tell us they’re both transforming business processes and revising/enhancing their cyber management (89% for both). Private companies are also increasing investments in several areas more so than other executives: IT (59% versus 52% overall), cyber (59% versus 49% overall) and digital transformation (57% versus 53% overall). Private company executives know that making investments in the right technologies and business processes will be essential to growth. 

Private companies are more concerned about talent acquisition and retention than public companies, with 61% of private company executives listing it as a serious risk (versus 38% overall). Private companies have traditionally found it harder to recruit top talent because they often don’t have the same access to capital, career development opportunities and brand recognition. 

Interestingly, private companies trail when it comes to raises for existing employees, with only 34% planning to increase compensation (versus 64% overall). On the other hand, only 20% of private company executives say they plan to — or have already — reduced headcount (versus 52% of public companies). Many private companies are outsourcing and using managed services more for non-core activities, which can help them focus on attracting key personnel for core activities.

Cyber tops the list of risks for both private and public companies. Fifty-seven percent of private companies mention more frequent and/or broader cyber threats as a serious risk (versus 39% of public companies). While cyber attacks are a risk for all businesses, public companies have spent years investing in security technologies and protocols. Private companies may not have the same resources, potentially leaving them more vulnerable to cyber attacks.

Private companies have a more pessimistic view of the economy, with 80% citing it likely that inflation will remain elevated (versus 62% overall) and 84% saying a recession is likely (versus 60% overall). The private sector typically feels the impact of both recession and recovery before the public sector. Still, nimble private companies that adjust their strategies quickly can take advantage of the opportunities that changes in the economic environment present.

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About the survey

Between August 1 and August 5, 2022, PwC surveyed 722 US executives including CFOs and finance leaders (13%), CHROs and human capital leaders (14%), tax leaders (13%), risk management leaders, including CROs, CAEs and CISOs (12%), COOs and operations leaders (12%), CIOs, CTOs and technology leaders (13%), CMOs and marketing leaders (13%) and corporate board directors (10%). Respondents were from public and private companies in six sectors: industrial products (24%), consumer markets (25%), financial services (22%), technology, media and telecom (14%), health industries (7%) and energy and utilities (4%). The Pulse Survey is conducted on a periodic basis to track the changing sentiment and priorities of business executives.

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