Cybercrooks, Inflation and Layoffs
One of the most challenging parts of being a CEO these days is staying one step ahead of cyber crooks. With online scammers proliferating in every corner of the globe, keeping data safe has become a game of Whack-A-Mole. Take one precaution, and another threat emerges. There’s seemingly no end to crooks’ ability to exploit the vulnerabilities of both our tech systems and trusting human beings.
Our Marcum-Hofstra CEO Survey reflects this, with the majority of CEOs saying their companies are not fully prepared for a cyber security threat. Only 32% believe they are well-prepared. If you’re among them, now is a great time to make sure your strategy includes beefing up your cyber security in 2023. With more of our business lives moving to the digital world with each passing day, this priority can’t wait, and this is one area where you can’t do too much.
Rising costs are also putting pressure on many businesses, to the point they can no longer absorb them, according to the survey—something that will come as no surprise to many of you. 72.1% of CEOs said they are being impacted by inflation, down only slightly from the 73.2% in the last quarter. And 36.8% are passing along higher costs to their customers, up from 33.4% in September.
Hopefully we’ll see some easing in the months to come, but regardless, this is a good reminder to keep a close eye on profits. If serving your customers are now costing you money, it’s time to reexamine your pricing structure.
In the current business environment, 90% of CEOs said they are at least somewhat concerned about a recession in 2023. However, many are less worried about a recession than before, with 46.5% “very concerned,” compared to 54.6% in the September.
Based on the survey results, it is looking like we will see some layoffs in the coming months. Nearly 48% of CEOs have begun to curtail or freeze hiring, and 9.3% expect to lay off employees in the next year. However, many employers are still taking a wait-and-see attitude, perhaps because they were so short-staffed that they can’t risk letting people go.
What I found most interesting was that despite all of the challenges that surfaced in the survey, 80% of CEOS still said they have a positive outlook. That number is down from 84% in September, but it’s still remarkably high. Perhaps after the pandemic we all endured, a cyclical recession just isn’t as daunting as it once was, and what almost broke us made us stronger.
This week’s inflation report had inflation at an annual rate of 7.1%, down from over 9% earlier in the year. The Fed followed the inflation numbers with a .50% increase in rates, the lowest increase this year after four rounds of .75% increases. If I read the tea leaves correctly, we will most likely have one or two more rounds of increases, most likely in the .25% range. Most experts are predicting rates will stay at that level through most of next year before starting a slow descent late next year or early 2024. Or they could all be wrong—only time will tell.
On Sunday evening, Hanukkah begins. Many public menorah lightings are resuming this year for the eight-day Jewish festival of lights, as we usher in the peak of the holiday season. To all of you who celebrate, Happy Hanukkah.
