8 Out of 10 CEOs Expect a Recession. But They're Still Optimistic About the Future

Recessions can be scary, but like most things in life, they will pass.

It may feel as if you can't open a newspaper or use the internet without seeing another warning of impending economic doom. Sadly, there's not a lot the average person can do to stop a recession. The best we can do is try to prepare ourselves so we can minimize the impact if the worst does happen.

In that respect, there's reassuring news from KPMG's latest CEO outlook report: Over three quarters of the 1,325 CEOs surveyed have plans in place to handle a recession. Another positive? While 86% of the CEOs predict a recession will strike in the next 12 months, 58% think it will be mild and short.

Optimism in spite of turbulence

Whether you're an employer or an employee, fostering an ability to roll with the punches is crucial for long-term success. The fact that many CEOs are already preparing for recession could be why over 70% are relatively optimistic about their company's prospects in the coming six months.

CEOs are looking for ways to minimize damage caused by an economic downturn. These include trying to improve productivity and manage costs, as well as shifting their strategic priorities. Even so, 75% said they thought a recession would make it harder to recover from the impact of the COVID-19 pandemic, and 73% felt it could interfere with their company's growth in the coming three years.

A potential recession is not the only challenge facing businesses today. CEOs are also looking for ways to handle pandemic fatigue, inflation, as well as operational and regulatory challenges. At a personal and professional level, the last few years have been extraordinary for many people, and that is playing out now in the global economy and also in our work lives.

CEOs do have a number of tools at their disposal to navigate the difficult waters ahead. For example, an increasing number of top executives are putting money into employee training. Retaining top talent is viewed as a top operational priority, which means investing in people and building a more transparent work environment.

CEOs are preparing for recession -- are you?

Take a page out of these top CEO's books and do what you can to prepare for an incoming recession. Some key steps you can take:

• Stash extra cash in your emergency fund
• Pay down high interest debt
• Revisit your budget to ensure you're living below your means

The more money you can sock away now into a savings account that's dedicated to emergencies, the better positioned you'll be to handle any kind of financial crisis.

Right now, the job market is strong, so if you are finding it hard to cover your bills and build up your emergency savings, it might be worth considering taking on a side hustle. Bear in mind that there are pros and cons to taking on extra work. It can bring in extra money and broaden your work options, but your time is also valuable. Be careful that your side hustle doesn't impact your ability to perform well at your regular job.

Prepare for a potential job loss

One of the biggest concerns about recessions is the potential for job losses. It's a legitimate worry -- the CEO survey showed that a number of business leaders think they may have to lay off staff. Almost 40% have already implemented hiring freezes, and 46% think they may have to downsize their employee base in the coming six months.

Take some time now to think about what you might do if you got laid off. How might you cope financially? How would you go about looking for a new job? What skills might you need to get hired? Now's a good time to dust off your resume and reach out to your professional network. It's better to connect with people now than further down the line when you actually need their help.

If your company is offering additional training, take advantage of what's available. Not only does it show you're motivated to learn, but it will put you in good stead if you do need to look for a new position. If that's not an option, look at online courses, books, and industry newsletters. Anything that helps you keep up to date with trends and opportunities in your industry is a win.

Bottom line

Recessions are scary, especially one that comes in the wake of the chaos caused by the pandemic. But they are also part of a normal economic cycle. If a recession does hit in the coming year, it will pass. So the best way to prepare is to brush up your professional skills and beef up your savings as much as you're able.