Amid hiring challenges, workforce expansion plans reach record high with 76% of SMB leaders seeking to add personnel this year
SAN DIEGO, Jan. 12, 2022 /PRNewswire/ — Confidence among small and midsize business (SMB) CEOs once again reflected rising concerns about Covid in the fourth quarter of 2021, according to the latest CEO Confidence Index from Vistage, a CEO coaching and peer advisory organization. The Vistage CEO Confidence Index, which measures SMB leaders’ sentiment on various economic and business topics, was 97.6 in Q4 2021, a fractional increase from 97.1 in Q3, as the Omicron variant replicated last quarter’s falloff in economic confidence due to the Delta variant. The Index peaked in Q2 at 108.8.
“Amid a rise in Covid-19 cases due to the spread of Omicron variant and the continued headwinds of inflation, supply chain disruption and talent shortages, leaders are once again faced with an overwhelming sense of uncertainty heading into 2022. Still, our data points to a slowly improving picture, fueled by anticipated revenue growth,” said Joe Galvin, Vistage’s chief research officer. “While much is still to be determined about the state of business in 2022, what we know for certain is that the war for talent will be CEOs’ top challenge in the year ahead as record numbers of businesses are hiring.”
Hiring plans have never been higher in the nineteen years that Vistage has been surveying small and midsize business CEOs, with 76% expecting to add personnel in the year ahead. This will be a challenge as nearly three quarters (72%) said hiring challenges are impacting their ability to operate their business at full capacity, up from 67% in Q3.
Additional survey highlights include:
Hiring and Retention
- More than a quarter (29%) of SMB CEOs reported a decrease in retention rates in 2021, an incremental increase from 27% in Q3.
- To combat hiring challenges, 78% of CEOs are boosting wages and 71% are developing their existing workforce.
○ Other top tactics include: refining recruiting strategies (58%), allowing employees to work remotely (48%) and adding employee benefits (43%).
○ 69% are investing in technology to reduce the labor burden on their product or service.
Inflation and Supply Chain
- As a result of inflation, 62% of SMB CEOs reported higher costs for raw materials and other inputs, 80% cited increased prices from vendors and 72% said they are offering increased wages.
- Nearly seven-in-ten (69%) increased prices over the last 90 days and 77% expect to increase prices in the year ahead.
○ 61% said they plan to increase prices between 5-10%.
○ 22% said they plan to increase prices more than 10%.
- Over one third (37%) said their supply chain is “slowly getting worse,” an improvement from Q2 2021 when 45% said they were getting worse, while 34% said “they are slowly getting better,” up 10 points from Q3 2021.
The Omicron Variant
- 48% said they have made or plan to make business changes in response to the ongoing pandemic and Omicron variant.
○ Changes include: safety protocols (75%), mask policy (63%), return to work plans (50%) and vaccination policy (41%)
- 43% have not made and do not plan to make business changes in response to the ongoing pandemic and Omicron variant.
SMBs Expect Higher Revenues, Higher Costs
- 48% believe the economy has improved compared to a year ago.
- 51% expect their firm’s profitability to improve during the next 12 months, a marginal increase from Q3’s 50%–the two lowest levels recorded since the pandemic began.
- 74% anticipate their firm’s sales revenues will increase during the next 12 months.
- 52% are planning for increased investments in new expenditures.
See the full results for the Q4 2021 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 2021 Vistage CEO Confidence Index includes responses from 1,540 U.S. CEOs, surveyed between December 7 and 14, 2021. 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
858.523.6875 | email@example.com