Hiring and retaining talent remain the top challenges faced by SME CEOs in 2024, study finds

Hiring and retaining talent remain the primary challenges that CEOs of small and medium-sized enterprises (SMEs) anticipate facing heading in 2024, a study has found.

This comes as the findings of Vistage Worldwide’s CEO Confidence Index for Q4 of 2023 were recently published. Established in 2003, the study surveys US-based SMEs CEOs, Presidents, and business owners about the US economy each quarter, with this edition of the study including responses from 1,363 CEOs, surveyed between 4th and 18th December 2023. Vistage Worldwide is a leading CEO coaching and peer advisory organisation for SMEs, with it having more than 45,000 members in 35 countries.

One of the focuses of the survey was on staff recruitment and retention, with more CEOs seemingly prioritising an investment in their workforce.

The study found that 56 per cent of CEOs plan to expand their workforce in 2024, equal to the 10-year average, and up by eight per cent from the previous quarter. Despite this, it is still slightly lower than last year’s 60 per cent.

Additionally, only seven per cent of respondents stated that they are planning on reducing headcount over the next 12 months. This comes as a sharp contrast to the prospects of many larger enterprises like Google and Amazon, which have made headlines over recent weeks for mass waves of layoffs.

Despite this, CEOs still anticipate hiring and retaining talent to be the top challenges in 2024, the report stated.

CEOs from all over the world, especially within the EU and specifically in Malta, have struggled with finding the right talent for their business, having faced a tight labour market, characterised by a shortage of skills and rising wage demands.

However, the report added that quit rates are slowing down, at least within the US-based respondents, with the hiring landscape improving as 35 per cent of CEOs are reporting that it is easier to hire than it was at the start of 2023. Only 11 per cent of respondents said that it was more difficult.

Additionally, 26 per cent highlighted that their budgeted wage increases in 2024 will be higher than in 2023. 47 per cent report that they will be relatively the same as in 2023, while 23 per cent stated that pay rises will be lower. Four per cent do not plan to raise pay in 2024.

This slowdown in wage increases was one of the key factors behind CEOs expecting revenue and profit to improve for the new year, with it being coupled by continued price increases. 59 per cent of SME CEOs expect increased revenues in 2024, while 47 per cent anticipate higher profits.

54 per cent of surveyed CEOs revealed that they plan to increase prices in the year ahead. While the change may not be as high as in previous years, the result is set to offset slowing wage increases and thus help preserve profits.

To read the full report, click here.