3 decision-making factors that will impact your business for the rest of 2022 [New report]
Between surging inflation, supply-chain snags, hiring woes and recession fears, it’s no surprise that CEO confidence has been on the decline. Recently, the Vistage CEO Confidence Index fell to 69.0, one of the lowest Index readings recorded since the start of the pandemic.
Another reason confidence is low? Uncertainty remains high. Without a line of sight toward a return to normalcy, many CEOs feel like their decision-making has been compromised.
The Q2 Vistage CEO Confidence Index survey, however, sheds light on the top decision factors for CEOs — namely, the economy, talent, customers, leadership and workplace. Based on our analysis, here are three insights and recommendations for CEOs from our latest report Decision Factors 2022: Unleashing Workforce Productivity. These insights can guide your decision-making toward short-term plans while also providing key considerations for your strategic planning process next year.
1. What we know: A new workplace is here to stay.
According to our Q2 2022 survey, nearly two-thirds (62%) of CEOs from small and midsize businesses offer remote work options, and 63% offer flexible hours and schedules. Another 7% plan to implement flexible schedules and hours in the year ahead.
In other words, most small and midsize businesses have adapted their workplace model. We refer to this model as the “Workplace 180,” or “W180,” as it represents a 180-degree shift from the traditional, pre-pandemic workplace.
What we recommend: Rethink your people, places, processes and technology.
The W180 has the potential to unleash productivity if you put your people in the right places and you equip them with the right processes and technology. What is “right” for any given employee depends on their role, responsibility and preferences. However, these recommendations broadly apply to essential, remote and hybrid workers:
- Essential workers should work on-site due to the nature of their jobs. Along with having a boss who can lead and coach them, they need continuous opportunities for training. To improve retention, consider offering them flex hours or even a 32-hour/four-day work week.
- Fully remote workers require robust home-office technology, including high-quality collaboration software. If your business has both on-site and remote workers, implement special protocols to ensure inclusion and equal opportunities for all. For instance, require most meetings to take place virtually and offer virtual events to build community.
- Hybrid workers need both a home office and a workplace station, along with clear expectations for work performed at the office versus at home. Ideally, you should have your hybrid workers perform individual tasks at home and use office days for collaborating, problem-solving and building interpersonal relationships.
2. What we know: Economic volatility is increasing.
In the past two years, economic expectations have swung wildly, while both expansion plans and financial prospects have surged and then sank. Now, factors like revenue and profitability projections are adding momentum to the overall Index.
What we recommend: Reset your expectations for economic activity.
The faster you reset your expectations for the economy, the faster your decision-making will adapt to cope with this volatility. Consider these economic predictions and next steps:
- Inflation will remain elevated, vacillating above the Federal Reserve’s target of 2%. Explore ways to mitigate the effects of inflation on your business, such as by reevaluating your workforce needs.
- Interest rates will reach higher levels in the months ahead. Before investing, weigh the opportunity cost of your investment against the actual cost of higher interest rates.
- Energy costs will continue to go up. Look for ways to reduce your energy consumption, such as by adopting more sustainable practices.
- The war for talent isn’t ending anytime soon. Persist in your efforts to retain your best people and keep your talent pipeline full.
3. What we know: The role of the manager has dramatically changed.
New workplaces and empowered workforces have dramatically changed the role of frontline managers. Today’s managers are tasked with rethinking how they connect with employees, maintain accountability, foster collaboration and more. Beyond managing people, frontline managers need to support their employees as a leader and coach.
What we recommend: Invest heavily in the development of your managers.
Don’t expect your managers to instinctively know how to fulfill this bigger, broader role; they need extensive training and development to do so. At a high level, managers need to learn how to manage and connect with a hybrid workforce, coach and empower people to excel, and oversee the performance of individuals and teams. At a more granular level, they need to translate cultural ideals into action, set clear expectations, build connections with workers, reward certain behaviors and motivate and inspire employees. Most likely, this will require a significant investment on your part.
These insights are designed to inform your decision-making so you can close out the year strong and more effectively plan for the future.
There’s more you need to know to adjust strategies in the short term and long term. Download our new report, Decision Factors 2022: Unleashing Workforce Productivity for a deeper dive into our data, plus insights from a top economist on their economic predictions for the year — and decade — ahead.