Today, Vistage, the world’s leading business performance and leadership advancement organisation for small and medium sized businesses, released its quarterly SME CEO Confidence Index for Q1 2023.
Q1 2023 Key Findings:
- Business confidence rose to 104.7 in the first quarter of 2023, compared to 80.1 Q4 in 2022 – an increase of 30.71%
- 70% of CEOs anticipate that their firm’s sales revenues will increase during the next 12 months.
- 71% of company leaders have increased the base compensation for employees
The report suggests that even though business leaders are feeling significant financial pressures, due to the downward turn of the global economy, the vast majority (70%) of CEOs anticipate that their firm’s revenue will increase during the next 12 months.
Overall business confidence rose to 104.7 in the first quarter of 2023, compared to 80.1 Q4 in 2022 – an increase of 30.71%.
As small and medium sized businesses manoeuvre past a turbulent start to the year, due to rising inflation, many are going the extra mile to ensure staff feel satisfied; making progressive steps towards staff retention. The report showed that 71% of company leaders have increased the base compensation for employees. Further to this over the last three months SME leaders have also increased investment within the following areas:
- Company Culture (60%)
- Leadership development (59%)
- Workforce Development (53%)
In addition to these areas of focus, business owners are also exploring further financial incentives. Almost half (43%) of leaders are actively investing in bonus and incentive programmes.
Still Feeling The Squeeze With Inflationary Pressures
While companies are investing in staff, they’re still feeling the impact of financial instability, as a result of inflation and the war for talent in a seemingly smaller pool. In fact almost half (41%) of all SME leaders claim that higher interest rates are having a significant effect on business performance.
Additionally, the report found that inflation is having a knock on effect on growth, as economic conditions force more businesses to think strategically about their next move. Over half (53%) of businesses are either reducing their workforce or delaying the hiring process. Furthermore, 42% of leaders have either delayed or reduced their overall capital expenditure; and 56% have made no changes to their capital investments plans in the last six months.
Vistage, Managing Director (UK), Steve McNulty said: “We are clearly seeing a shift in the behaviours of business leaders who may be streamlining departments, but are also taking the necessary steps to improve the overall retained employee experience through compensation reviews, bonuses and other financial incentives.”
“While a step in the right direction for top talent, it’s important not to forget about the power of communication during periods of economic instability. Yes, money talks, but having an open dialogue goes a long way for fostering a sense of trust and a better relationship between company heads, and staff.”
