Small and Midsize Business Confidence Improves, Driven by Increase in Hiring Plans
SAN DIEGO, Jan. 5, 2023 /PRNewswire/ — Small and midsize business (SMB) CEO confidence posted incremental quarterly gains in Q4 2022, according to the latest CEO Confidence Index from Vistage, as SMB leaders’ expectations for hiring and profit grew.
Vistage, a CEO coaching and peer advisory organization, has measured SMB CEOs’ sentiment on a variety of economic and business factors each quarter since 2003. In Q4 2022, the Vistage CEO Confidence Index continued to trend upwards reaching 75.3, up from 73.4 in Q3 2022 and 69 in Q2 2022; however, this recording is 22.9% below Q4 2021 largely due to continued uncertainty about the length and depth of a potential recession.
“As economic uncertainty persists, business leaders are shifting their focus to areas they have more control over, such as hiring and retention,” said Joe Galvin, Vistage’s chief research officer. “Despite fears of potential recession, unemployment has stayed at near-record bottoms and the job market has proven its resiliency. In the new year, we can expect hiring to remain a priority for CEOs, and begin to see some degree of stabilization after the unprecedented turbulence of 2022.”
Survey highlights include:
An increase in SMB CEOs’ plans to hire in the next year.
- 60% of SMB CEOs plan to increase hiring in the year ahead (up from 52% in the prior two quarters, but below last year’s 76%)
- 61% report hiring challenges are impacting their ability to operate at full capacity
- For the first time the proportion that say it is easier to hire (28%) is greater than those that report it harder to hire (20%) compared to the start of 2022 (52% reported no change)
- 87% already have or are planning to invest in automation technology in order to reduce the labor burden
- For those having trouble hiring–
- 84% are boosting wages
- 72% are developing their existing workforce
- 68% are offering flexible hours/schedules
- 61% are implementing leadership development programs
- 60% are allowing remote work options
SMBs expect higher profits and increased revenues in the year ahead.
- 43% of SMB CEOs anticipate higher profits in the year ahead (up from 38% in Q3 2022 and 32% in Q2 2022, but below last year’s 51%)
- 58% expect increased revenues in the year ahead (up from 54% in Q3 2022 and 52% in Q2 2022, but below last year’s 74%)
Inflation remains a major challenge for leaders.
- 70% of SMB CEOs intend to increase prices for their products or services in the year ahead
- 88% reported they are currently offering higher wages to new hires compared to wages offered for similar roles one year ago
- When asked about which effects of inflation are impacting their business:
- 93% said increased wages and compensation
- 82% cited increased prices from vendors
- 64% reported higher costs for raw materials
- 58% experienced higher energy prices
See the full results for the Q4 2022 Vistage CEO Confidence Index.
About the Vistage CEO Confidence Index
The Vistage CEO Confidence Index, established in 2003, is a quarterly survey of small to midsize business CEOs, presidents, and business owners about the U.S. economy. The Q4 2022 Vistage CEO Confidence Index includes responses from 1,373 U.S. CEOs, surveyed between December 5 and 12, 2022. Since its establishment in 2003, the Index has proven to be a reliable indicator for changes in GDP and employment, two to three quarters hence.
About Vistage Worldwide, Inc.
Vistage is the world’s largest CEO coaching and peer advisory organization for small and midsize businesses. For more than 65 years, we’ve been helping CEOs, business owners and key executives solve their greatest challenges through confidential peer groups and one-to-one executive coaching sessions. Today, more than 45,000 members in 35 countries rely on Vistage to help make better decisions for their companies, families and communities. The results prove it: Vistage CEO members grew their annual revenue on average by 4.6% in 2020, while nonmembers with comparable small and midsize businesses saw revenue decrease by 4.7%, according to a study of Dun & Bradstreet data. Learn more at vistage.com.
Katie McWeeney | Vistage
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