A CEO is expected to be the guardian of an organization. He or she must ensure that the company is meeting its goals while preparing for the future. Transformational CEOs will inspire a sense of purpose and direction while readying the company to deal with unexpected changes and crises. While uncertainty and volatility have become commonplace in the last three years, CEOs look after a company’s future growth and assuage the worries of stakeholders. But this is easier said than done. As headwinds threaten to derail 2023 profit forecasts, most CEO concerns center around three main things – inflation, supply chain issues, and shortage of skilled workers.
Inflation concerns have been largely universal with CEOs fretting about rising costs eating in profits. The 2023 findings of the fifth-annual Priorities for Business Leaders survey, commissioned by Paychex, Inc., reflect the sentiments of 450 businesses employing between five and 500 employees across the US. The survey shows that the number of business concerns of 72% of people is inflation, regardless of company size.
C-suite executives also predict supply chain issues and skilled labor shortages to disrupt the economy as global financial markets witness the after-effects of the pandemic boom.
The three main CEO concerns in 2023 are listed below.
The most effective CEOs guide their companies through crises and give them a tangible vision to hold on to.
Inflation
According to the C-Suite Outlook 2022, almost 74% of CEOs in the US cited inflation concerns as prices climb higher, due to labor shortages,
Swiss Bank UBS CEO Ralph Hamers is convinced that inflation is here to stay. And the best way to deal with it is to first accept it. In an interview with Bloomberg Markets and Finance, he told the host “higher inflation rates are here to stay.” He asserted that 2023 is the year of inflection for global economies as inflation, economic growth, and interest rates take center stage.
Hamers recommended that markets must wait for key data points before declaring that falling inflation is real.
Despite bracing for weaker growth, CEOs are worried that high inflation translates to high borrowing costs, leading to curtailment of expansion plans and thereby reducing economic growth.
Skilled Labor
Back in August 2022, Heimo Scheuch, CEO of Wienerberger, told CNBC that companies are facing a general lack of skilled labor.
The Paychex survey also found that for 46% of business leaders, staffing is a major concern. In the heavy equipment industry, the losses are staggering due to a shortage of skilled labor. Dealerships are losing around $2.4 billion every year as they cannot find skilled personnel for the jobs at hand.
Skilled labor is the need of the hour and offers an alternative to the traditional college route. The main reasons for a shortage of skilled labor is due to a lack of understanding of trades, lack of adequate in-house training, and misplaced educational priorities.
Commercial construction and manufacturing industries, the pillars of an economy, are always on the lookout for skilled laborers.
Supply Chain Issues
With shortage of resources, rising cost of raw materials, and the ongoing Russia-Ukraine war, supply chain disruptions are expected to happen in 2023.
As the supply chain remains fragile, CEOs must focus on building systems that mitigate risk and predict future disruptions to minimize damage. It is important to keep supply chains agile and resilient to deal with unexpected shocks and to manage disruptions efficiently and profitably.
Governments and industry leaders must invest in technology that identifies threats and neutralizes them at source. The supply chain is only as strong as its weakest link.
CEOs who push for greater transparency and resilience will prepare their companies for the volatility that 2023 is expected to bring to global markets.
SAP CEO Christian Klein told CNBC that while CEOs are becoming increasingly cautious about spending, companies must focus on their supply chains and sustainability efforts to keep businesses running smoothly.
Although whispers of a recession prevail, most CEOs are bracing themselves for a slowing economy attributed to these three factors. A shortage of skilled labor combined with supply chain issues can wreak havoc on any growing economy or business.
