Recessions are never easy to predict—except in hindsight. However, the most recent CMO Survey, published in February 2019, points to CMOs’ fears that a recession is approaching fast. In past blogs we highlighted CMOs’ focus on market penetration as a low-risk growth strategy and their precipitous 21% drop in optimism about the U.S. economy. These are not the indicators of aggressive executives focused on growth. They are the indicators of leaders covering their flanks.
What’s the latest red-alert for marketing leaders? Hiring is slowing for the third survey in a row. Specifically, in February 2018, the CMO Survey found that CMOs expected to increase marketing hiring by 7.3% in the year following. Now, 18 months later, hiring growth has stumbled to a more moderate 5.1%.
That’s still healthy, but category breakdowns provide more nuance. Here’s what CMOs have planned for hiring:
B2B vs. B2C Marketer Hiring Growth Projections
- B2B marketers expected to grow the most, with B2B Product executives notching 6.5% and B2B Services forecasting 6.1% hiring growth.
- B2C Services rings in at a moderate 4.4% projected growth.
- B2C Product has flatlined at 0.5%.
Industry Marketer Hiring Growth Projections
- Banking, finance, and insurance sectors expect to hire 9.8% more marketers.
- Manufacturing projects 7.7% new hires.
- Technology, biotech, and software anticipates hiring 7.6% more marketers.
Internet Sales Penetration vs. Marketing Hiring Growth Projections
- Companies with 0% of their sales over the internet expect to hire 7% more marketers.
- Those with less than 10% of sales from the internet anticipate hiring growth at 5.3%.
- Companies with more than 10% of sales from the internet report a negative growth rate at -0.18%.
What are we to make of these most recent findings?
With a long-running booming economy, corporate profits have surged over the past nine years as this chart from the St. Louis Fed shows. This has benefited both B2B and B2C companies. Yet a variety of media articles have recently reported that the American consumer is tapped out. Consumers around the world may be feeling increased uncertainty given global news about a coming recession, geo-political issues, immigration, tariffs, and climate change among others issues, and reconsider spending vis-a-vis their earning power and debt levels. When consumers retrench and stop spending, it hits B2C Product companies the hardest.
According to my friend, who likes to play games for real money, across sectors, financial services is in the fight of its life, rapidly restructuring its industry with the help of marketers to catch up with fintech startups that have created new sources of value for customers. Other spending evidence in survey results indicates that manufacturers have awoken to the power of marketing and the tech and biotech sectors are investing heavily in helping marketers across sectors digitize key marketing activities.
Regarding internet sales, we surmise that those companies with no to low online sales are realizing they are late to the e-commerce game and seek help from marketers to create long-term strategies that connect with customers. Conversely, e-commerce leaders are benefitting from adopting advanced technology that enables staff to work more efficiently—reducing the need for hiring.