General Business News

Pressures On Retention As Businesses Enter 2023

Vistage, the world’s leading business performance and leadership advancement organisation for small and medium sized businesses, has released its quarterly UK SME CEO Confidence Index for Q4 2022. Business confidence hit 80.1 points, 5% increase since the last quarter.

Key Findings:

  • 80% of business leaders are specifically analysing retention as the key people metric
  • 81% of business leaders are providing development opportunities for their company’s managers and leaders
  • 74% of business leaders are offering flexible hours/schedules

The reports uncovered that 60% of CEO’s expect the overall economic conditions in the United Kingdom and Ireland to worsen in the next 12 months. Over one in three (34%) expect profitability to worsen during the next 12 months.

Pressure On Retention
Recruitment and retention will be a key focus for companies as we enter the new year, with more than one in two (51%) business leaders currently refining their recruitment strategies.

According to the study, four in five small and medium sized business leaders are specifically investing resources in 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. As a result businesses are remaining agile in a bid to keep talent.

A further 60% of leaders believe that hiring challenges are impacting their ability to operate their business at full capacity. Unsurprisingly, 81% of business leaders are investing in learning and development programmes for managers and leaders specifically.

Agile Business For Flexible Workers
SME leaders have identified employee satisfaction as a key business objective in the next few months. As such, CEOs are prioritising tactics designed to raise morale through benefits, wage increases and fostering a greater sense of employee autonomy. In fact, currently 70% of business leaders are now allowing remote work options, while 74% are offering flexible hours and schedules. The study also found that 70% of companies have implemented wage boosts.

Increased Financial Pressures
A majority of small and medium sized businesses forecast price increases for products and/or services; 82% expect the rise to occur within the next 12 months. Over the last quarter SME leaders have had steep rises within the following areas due to inflation:

  • Wages and compensation (93%)
  • Energy prices (80%)
  • Prices from vendors (70%)

However, business leaders are seeing promising signs elsewhere with 47% stating that their supply chain is slowly getting better.

Vistage, Managing Director (UK), Geoff Lawrence said: “The reality is no company can thrive without having the right quality and quantity of employees. SME leaders understand the volatility of the job market and are now ensuring employee satisfaction is kept front of mind while making key business decisions. Our latest CEO Confidence Index suggests that the pressure to improve retention is driving flexible work opportunities, while financial pressure raises salary expectations.”

“It’s all about finding the right balance by investing time and resources into the right talent; but that also can, and should, be counterbalanced by developing your own leadership skills as a CEO – particularly during this difficult economic period.”

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