By Joe Galvin, Chief Research Officer, Vistage
The past year has been marked with widespread turmoil, unexpected inflation, price increases, skill shortages, and workplace innovation for many firms. As a result economic confidence among small businesses owners has declined. In fact, according to the Vistage Q4 SME CEO Confidence Index report, 60% of CEOs anticipate that the overall economic conditions in the United Kingdom and Ireland will worsen in the next 12 months; a further one in three (34%) expect profitability to worsen during the next 12 months.
This all suggests a sharp slowdown in economic activity and generally weaker growth. Or in other words – we’re in for a bumpy ride this year. That’s why it’s important for company heads to nurse the non-proverbial ‘economic handover’ of 2022 as new issues enter the fold in 2023.
Here are three considerations and best practices for business leaders to take on board to make sure they’re primed to face issues headstrong:
Adjust to New Ways of Working
While the pandemic caused mass disruption across workplaces globally, it also fuelled a workforce revolution that’s here to stay – The Workplace 180 – representing a 180-degree shift from the traditional attendance-based workplace of the Industrial Era to a more productive, flexible and digital way of working.
While there are some vocal critics of hybrid working, according to a 2022 survey by the Office of National Statistics (ONS), 84% UK workers who had to work from home because of the coronavirus pandemic said they planned to carry out a mix of working at home and in their place of work in the future. As a business leader, by openly adjusting to a new way of working you have the potential to unleash untapped productivity in ways we’ve never seen before. Here are three considerations for business leaders looking to finally cement that hybrid way of life in 2023:
- If not already, business leaders should adjust physical workplaces, culture, working hours and how employees are managed to suit the needs of individual workers, their roles and functions. A one-size-fits all approach isn’t going to cut it anymore.
- The executive leadership team should focus on productivity, performance and execution of work as key performance indicators, over attendance. This allows employees to complete individual tasks at their discretion and unleashes productivity, while fostering a greater sense of autonomy at the same time.
- The employee experience is crucial in the shift to 180. Business leaders should focus on bringing culture to life, having strict standards for deliverables and accountability, thinking about influence, motivating and trusting employees, and building connections with workers they don’t see every day.
Invest in the Right Talent
As well as economic uncertainty and slower growth overall, businesses have continued to experience significant talent shortages throughout 2022. Based on results from the Q4 CEO Confidence Index, recruitment will be a key focus for companies in 2023, with more than one in two (51%) business leaders currently refining their recruitment strategies.
Beyond recruitment the study also showed that four in five small and medium sized business leaders are specifically investing resources into retention strategies following the ‘Great Resignation’ era, which saw a surge in employees voluntarily resign in response to wage stagnation and lack of value for work. Here are some strategic tips to make the most out of recruitment in 2023:
- Introduce dedicated positions for hire and use recruiting firms for executives and managers.
- Review the recruitment process and timing and use flexible options as a differentiator.
- Make hiring an issue for the entire organisation and offering incentives for referrals
- Invest in apprenticeship programmes and look to other countries for low-cost employment.
Rethink Resourcing, Focus on Impact
By observing customer purchasing behaviour, business leaders can gather a pretty good idea of how confident they should feel about their prospects. While the pandemic certainly had a negative effect on buyer behaviour, buyers grew will prove even more cautious with their purchasing this year amidst the cost of living crisis. A 2022 survey by EY, indicates that 52% of consumers are already spending less on non-essential consumer goods.
Company executives should remain nimble and on-top of these evolving trends in order to pivot internal resources so staff are able to focus on areas of the business that are going to drive the most impact and sales, or that truly need additional support during a rocky period. Some key considerations for business leaders going into 2023 include:
- More buyers are searching for and purchasing products online. Companies should rethink their digital platforms to meet the demand for digital interactions.
- Virtual selling is replacing face-to-face. Customers now expect salespeople to have advanced technological skills and deep knowledge of products, markets, and customers.
- Sales cycles will slow further due to more conservative buying approaches.
- Customers will look to establish and maintain stronger relationships with suppliers. More sophisticated digital interactions are key to achieving this.
Businesses across the UK are in a period of rebuilding and growth. The uncertainty and volatility of the 2022 economic cycle has definitely made CEOs hypervigilant about their markets and growth implications. As company heads look to tackle issues leftover from 2022 headstrong it’s important to remain flexible to the ebbs and flows, as and when new challenges crop up in 2023.