- The confidence of small and midsize business (SMB) CEOs is trending up, boosted by business leaders’ expectations for hiring and profits, according to the latest CEO Confidence Index from CEO coaching and peer advisory firm Vistage. In Q4, confidence levels reached 75.3, a slight bump from 73.4 in Q3 and 69 in Q2, but is still below the level of Q4 2021, the index found, due to recession concerns.
- Nearly two-thirds (60%) of SMB CEOs plan to increase hiring in the next year, up from 52% in Q3 and Q2, according to the index, released Jan. 5. Also, for the first time since the start of 2022, the proportion (28%) of SMB CEOs who say it’s easier to hire is greater than those who say it’s not (20%). But there are concerns: The percentage of SMB CEOs who plan to increase hiring is still lower than last year, a Vistage press release noted. And 61% of CEOs say hiring challenges are affecting their ability to operate at full capacity, a recognition that “regardless of how the economy vacillates the availability of workers will remain tight,” Joe Galvin, Vistage’s chief research officer observed in a related post.
- Of the CEOs who have trouble hiring, 84% are increasing wages and compensation; 72% are developing the existing workforce; 68% offer flexible hours and schedules; and 61% are providing leadership development programs, according to the index. “As economic uncertainty persists, business leaders are shifting their focus to areas they have more control over, such as hiring and retention,” Galvin stated in the release. “In the new year, we can expect hiring to remain a priority,” he said.
The findings that SMB CEOs plan to increase hiring are on par with other contemporary surveys. But the improving sentiment, tempered by concerns about the economy, could leave them without a clear direction, Galvin noted in his post.
However, this may present a key opportunity for business leaders to leverage the HR profession’s growing role as a strategic consultant. Analyzing talent is one of HR’s top areas of expertise, a CHRO recently told HR Dive. The last couple of years have taught HR how to better utilize the skill sets of current employees when the talent employers are seeking to acquire isn’t always available, the CHRO said. HR knows how to increase or decrease levers to get the results an organization wants, she added.
The strategy also strengthens employee retention, which is improving, according to the Vistage findings. “In a sharp reversal from a year ago, 26% of CEOs report increasing retention rates,” Galvin wrote in the post. When organizations allow someone to work in new and different ways, they’re less likely to take their talent elsewhere, experts previously told HR Dive.
Galvin praised another retention strategy gaining traction: leadership development programs. “The core of every employee’s experience is their boss, the person they report to,” he pointed out. “Their boss defines their responsibilities, establishes their goals and measures their performance. More importantly, the boss brings culture to life for the worker and team. ... [W]orkers don’t leave companies — they leave bosses,” Galvin said.
Despite the uptick in confidence of those who lead small and midsize businesses, hiring plans may be uneven depending on company size and industry, a December survey by ResumeBuilder and Pollfish indicates. To avoid layoffs, 3 in 4 businesses offered voluntary separations in 2022; 53% said they needed at least 1 in 5 workers to quit to avoid layoffs, HR Dive reported.