Texas business executives are more optimistic about the nation’s economic outlook than their peers in other states, even though more than a quarter of them have started or are considering layoffs.
That’s the key finding of a survey of over 500 C-level and senior executives across the U.S. on their economic outlook for the next year. Digital consulting firm West Monroe, which has a Dallas office, said its survey included 51 executives from Texas, 69 from California, 43 from Florida, 32 from Illinois and 53 from New York.
The businesses polled in the Lone Star state ranged from healthcare to real estate businesses and from over 1,000 employees and over $3 billion in annual revenue to less than 100 employees and under $500 million in revenue.
According to the Texas businesses that responded, 8% have already laid off employees and are considering additional layoffs, 8% are in the process of laying off employees and 12% are considering layoffs. The other 73% aren’t considering layoffs over the next six months, higher than the 59% average among the states.
Of the executives polled across the five states, those in Texas were the least likely to be considering layoffs over the next six months.
The overwhelming concern among Texas executives considering layoffs is the impact on employee morale.
Adam Gersting, West Monroe’s Dallas office lead, said companies need to be thoughtful about how they go about layoffs.
“The way in which employers let employees go has a significant impact on morale and retention of those who remain,” he said.
Texas respondents indicated their top concerns over the next year are the economy, inflation and pricing, and labor and employment issues. The state’s executives are more concerned about labor than those in any of the other states, with 43% of Texas respondents identifying it as a top concern.
“I actually view this as a good thing,” Gersting said. “It’s an indication that businesses continue coming to and expanding in Texas, which creates a demand for more and higher caliber team members to be hired.”
When asked about what business issues they think will be resolved in the next 12 months, 40% of Texas executives said supply chain and 33% said inflation.
Gersting said what he found most interesting in the survey results is that Texas executives had a more positive outlook than those in any other state.
“It ties into what we’re seeing with more and more companies coming to Texas, given the favorable business environment, its geographical location and the political climate,” he said.
When asked about the most overhyped tech trend, 45% of the Texas business leaders answered with “crypto” and 33% said the Metaverse.
“While in recent days the crypto market has had some notable downward impacts with the FTX bankruptcy, it’s certainly an area that will continue to exist and play into what banks are doing and needing to support,” Gersting said. “Or maybe banks may need to recognize that it’s part of banking now.”
West Monroe has sent out a similar survey to executives since the beginning of the COVID-19 pandemic, Gersting said. It’s a way to gain insights into what executives across the country are thinking and feeling about the market, he said.
Texas executives who participated represented a range of industries, from agriculture, health care and finance to real estate, retail, telecommunications and energy. About 41% work at companies with over 1,000 employees; 29% between 100 and 999 employees, and 29% under 100 employees.
About 51% of Texas executives said their company’s revenue was under $500 million, while 22% were between $500 million and $1 billion, 17% were between $1 billion and $3 billion and 12% were over $3 billion.