Well over a year into the pandemic, U.S. corporations are still adapting to economic, labor and supply chain challenges. Knowing that additional effort will be required to achieve growth in the coming year, CEOs and other business leaders will be laser-focused on five critical areas – sales, spending, supply chain management, staffing, and flexible work arrangements.
Though slightly less optimistic about the economy, CEOs hope to increase sales.
With the introduction of a COVID-19 vaccine, business leaders were very optimistic about the economy in early 2021. In its third quarterly outlook, however, the Business Roundtable reports that CEOs aren’t quite as optimistic about sales as they were in Q2. Concerns about tax policy, public health and staffing difficulties are tamping down their outlook. However, 81% still believe they will increase sales.
How will businesses facilitate sales in the coming year? Driving innovation and technology, developing new products, fulfilling pent-up demand, and achieving operational efficiency will play key roles. But CEOs will look at a variety of internal and external factors to drive growth. These include pricing changes, mergers and acquisitions, and other activities.
CEOs will increase capital spending in the next year.
Despite a challenging financial landscape, business leaders know that investments are required for growth. Sixty-three percent plan to increase spending, while only four percent will reduce spending.1
Companies will spend to hire and retain workers, implement new technologies to improve the business, and sustain the environment. Given pandemic implications, most don’t anticipate increased spending on real estate. However, more than half will increase travel spending, which was significantly reduced over the past year.
Managing supply chain disruptions will be a top priority.
With shortages in everything from semiconductors to canned foods, supply chain risk is a top concern for CEOs. There’s good reason. One of the nation’s largest port operators cautions that supply chain problems could continue into 2023.
According to Thomas O’Connor, senior director analyst with the Gartner Supply Chain practice, CEOs are directing their supply chain officers to “focus on navigating through the ongoing disruption and ensure business continuity.” A growing number of CEOs see cost-optimization as a means to manage through supply chain obstacles.2
Companies are enhancing hiring approaches to address labor shortages.
The national unemployment rate fell by almost one-half percent in September 2021, but it’s still higher than before the pandemic as 8.4 million American workers are without work. Even so, there were 10 million unfilled job openings in the same month, and businesses are struggling to fill roles. Seventy-four percent of CEOs are having a hard time finding qualified staff. Lack of talent is widespread, but some are more susceptible than others.
As the pandemic lingers, businesses and workers alike are being forced to re-evaluate their circumstances. Workers are taking a fresh look at opportunities to improve their employment situations – available positions, pay, remote work, and other potential benefits. Employers are responding to staff shortages with a variety of tactics, hoping to attract the staff they need.
ManPowerGroup found that employers are also offering non-financial incentives, including better opportunities for training, more vacation, mentoring, eliminating drug screenings, and relaxed job requirements.
Flexible working arrangements are important to potential employees and businesses.
When faced with shutdowns in the early months of the pandemic, many businesses were able to offer remote work as an alternative. More than 97% of employees would like to continue working remotely at least some time. Scheduling flexibility, the ability to work from any location, and not having to commute are the primary benefits employees cited for desiring remote work.3
Given the number of employees who desire flexible working arrangements, companies providing this option can better attract and retain talent. Related advantages include costs savings from lower employee turnover. Just under half of executives in a CNBC survey, said they will implement a hybrid work model in the latter part of 2021. They see this as the most reasonable option to address pandemic-induced staffing shortages.
The realities of operating in a recession are shaping businesses’ goals for the future. Contact Synovus Treasury and Payment Solutions, your Treasury Consultant, or Relationship Manager for help with 2022 business planning.
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