Despite looming recession, C-suite leaders are more confident about their own companies
Despite concerns about the economy, C-suite executives are more bullish about near-term revenue than they were a year ago. The vast majority of company leaders are concerned about inflation or a recession–or the combined effect of both–but expect to invest more this year in areas that will reap long-term benefits.
Qualtrics asked CEOs and other C-suite executives about what they expect in the next year, how they plan to handle a recession and the effects of COVID-19 on their business. Here’s what they said:
Leaders are concerned about the economy — but optimistic about the future of their companies
- Most C-suite leaders (93%) are worried about a recession or some type of inflation
- 40% are worried about stagflation, 34% about inflation and 18% about a recession. Only 8% said they’re not worried about any of these economic hurdles.
- But the vast majority of leaders expect their companies’ revenue to continue increasing:
- 80% said their company revenue increased in the last year, and 83% expect it to increase in the next. That’s up from 76% a year ago in July 2021.
- About two thirds (66%) expect overall growth for their organizations, while only 59% did in July a year ago.
- Leaders don’t seem to expect a long downturn. Most are more likely to use short-term cost-saving measures in the event of a recession:
- The most common budget cuts would be to customer or client-facing travel and employee perks (40% of executives say they would cut spending in each category), followed by internal travel (36%)
- Only 4% said they would reduce hiring plans, and less than a quarter said they would downsize their workforce
- 40% of executives said the biggest threat to their companies’ success is the increased cost of supplies, similar to what they said a year ago. And more than half (54%) said they’re experiencing a supply chain reconfiguration. Other threats to success include:
- New technology (37% said so)
- Global political events (27%)
- Workforce shortage (27%)
- C-suite leaders believe what will have the biggest impact on their companies’ success is:
- New technology (53% said so)
- Innovation and new products (45%)
- Increased operational efficiencies (42%)
Executives are taking a long-term view when planning where to invest
- The leading category for additional spending is technology modernization, with 73% of leaders planning to spend more.
- 72% of executives say they’ll spend more on staffing/retaining their workforce, up from 62% a year earlier.
- The majority of executives (66%) expect their employees to become more demanding in the next three months — up significantly from 56% in July 2021.
- When it comes to the workforce, leaders’ first priority is retaining their top performers, followed by hiring new employees, then the productivity and engagement of their current employees.
- The things they plan to spend on are:
- Tech modernization (73% said so)
- Cybersecurity (73%)
- Staffing/retaining workforce (72%)
- Training/reskilling workforce (70%)
- Remote work support (70%)
Executives don’t think we’re done with the business impact of COVID
COVID changed a lot about the way we work, but 38% of C-suite leaders say it has forever and fundamentally changed the way they do business (compared to 42% in July 2021). Forty-four percent, however, expect the business effects of COVID will be largely over by the end of the year (about the same percentage as last year). The remaining 18% expect their business will still be impacted at year’s end.
When asked about their priorities for this year and beyond, public health was most C-suite executives’ top priority, with 40% of executives identifying it as a 2022 priority, up from 35% in 2021. Their other priorities included:
- Cybersecurity (38%)
- Tax policy (38%)
- Fiscal policy (38%)
As executives plan for an economic downturn and make tough decisions about spending, leaders remain positive about their own companies and are investing in areas that will lead to long-term success.
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