Respondents to the latest McKinsey Global Survey1 are more than twice as likely to say that their company will hire in the next six months as to say it will shrink its workforce. Among those who predict their workforce will grow, nearly 90 percent expect that most of those new hires will be working in newly created jobs (Exhibit 1). While companies continue to offshore, nearly two-thirds of respondents whose company plans to hire say that the majority of the new employees will be located in the same country as corporate headquarters, a figure that rises to 78 percent in North America.
The fairly buoyant hiring plans accompany a rise in executives' confidence in the overall economy (Exhibit 2). From June to September, oil prices fell, interest rates remained stable in most countries, and—in contrast to last year—no severe hurricanes struck the United States. Executives grew more confident in both the current conditions of and prospects for their national economy and their industry.2
Executives' sentiments about hiring are consistent across developed countries, with some 45 percent planning to hire. In developing countries, 55 percent of respondents say they will add to their workforce in the next six months. Executives in China and India, and those at the smallest companies (with annual revenues less than $500 million), are the likeliest of all to be hiring.
Among developed countries, executives in North America are the most likely to say they will hire at home; European executives are the least likely, with 43 percent planning to hire abroad. Thirty-nine percent of executives in developing markets who plan to hire say their company will do the majority of its hiring in other countries (Exhibit 3). The smallest companies are, naturally, the likeliest to hire at home.
Of the jobs that will be created in different countries, just over half will comprise new functions designed to take advantage of new market opportunities; the rest will either take advantage of geographic differences in labor markets or consist of functions currently or formerly performed at home (Exhibit 4). The share of jobs that will comprise the same functions as those performed at home is fairly consistent, at about one-quarter, across all regions.
Outsourcing also proves not to be a major factor for companies that expect to reduce their workforce. Only 18 percent of respondents say that their company expects a decrease, though the figure rises to some 30 percent at the largest companies. Respondents cite two main causes (each garnering 37 percent) of the decrease: not replacing employees who leave voluntarily and laying off or firing employees.
How would work get done with fewer employees? According to 43 percent of respondents who expect their workforce to shrink, technological improvements will allow their company to perform the same work with fewer employees. Another 26 percent say that the work done by departing employees is no longer necessary because business needs have changed. Only 19 percent of executives say they will outsource the work previously done by their employees. 
Notes