PwC Pulse Survey: Managing business risks

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.