As business leaders look ahead to the second half of 2024, they face geopolitical instability, a looming general election, interest rate uncertainty and nagging inflation amid a persistently strong labor market. Today’s CEOs have never had to navigate more confusing — and often contradictory — economic signals.
Our most recent survey of small and midsize business CEOs captured the biggest challenges leaders are up against. Our analysis revealed the following five issues that are keeping leaders up at night:
1. Talent
It’s not surprising that talent acquisition and retention are persistently ranked the No. 1 CEO challenge. As we learned firsthand during the “Great Resignation” frenzy of 2022, people are the human engine behind organizational success. While hiring has slowed, the quit rate remains above pre-pandemic levels. As a result, business leaders are shifting their focus from hiring to retaining employees.
With turnover, business leaders lose more than just specific employees. Perhaps more devastatingly, they also lose experience and historical knowledge, which require time-consuming and costly training and coaching once a replacement is hired.
Keeping top talent on staff presents a particularly unique CEO challenge in today’s always-connected world, with resources like LinkedIn and Indeed at arm’s reach for every employee.
2. Economic uncertainty
For business leaders, there is no controlling the economy, making today’s chronic uncertainty particularly hard to navigate. Factors such as geopolitical pressures and the upcoming U.S. election in November are making it increasingly arduous for leaders to forecast the economy’s trajectory.
CEOs are also up against the two “I’s”: interest rates and inflation. While an interest rate cut may still happen this year, the economy won’t feel the resulting impact until at least 2025. And despite inflation moderating, it remains particularly higher than pre-pandemic levels. In particular, talent acquisition and retention costs have risen, according to more than half (59%) of CEOs interviewed in our recent Q2 Vistage CEO Confidence Index.
3. Growth and scaling business:
Customers are experiencing the same economic uncertainty as CEOs. As a result, they are slowing decisions and delaying investments, making it difficult to manage growth and scale. Many CEOs are trying to predict when the next growth cycle will begin so they can turn up the dial on their investments accordingly. No one wants to be behind the curve when the next cycle inevitably hits, so leaders are tasked with finding the best time to strike.
4. Succession planning
As the aging Baby Boomer generation continues to retire rapidly, the topic of succession planning is becoming more of a priority. Leaders are focused on developing their next team of leaders and preparing their businesses for a seamless handover when they decide to step down. The changing of guards has never been more pronounced, as the world’s largest generation turns 65 en masse, leaving leaders to plot out their executive team’s future in one fell swoop.
5. Employee engagement
During the pandemic’s “Great Resignation” era, employers emphasized employee experience and company culture. Workers were in the driver’s seat, and many got raises or even new positions due to the skyrocketing rate of workforce velocity.
As the labor market softens, employers must now find new ways to keep employees motivated, focused and connected to the organization’s greater purpose. This will not only help the organization achieve business success now but also ensure they are ready to accelerate when the next growth cycle kicks off.
Many leaders continue to have the added challenge of a tug of war with employees as they determine what flexibility and hybrid work look like within their organizations — a back-and-forth that is not going away anytime soon as technology and a persistent and growing labor market continue to change how we work.
As CEOs enter the second half of 2024, they may be navigating uncharted territory — but the same problems remain. They may shift in priority, but issues such as talent, growth, and the economy remain top concerns among CEOs.
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