Majority of business leaders reject four-day work week
Vistage, the world’s leading business performance and leadership advancement organisation for small and medium sized businesses, released its quarterly UK SME CEO Confidence Index for Q2 2022. The study reports that the SME business confidence index hit 77 points, a 22% decrease since the last quarter.
The index has revealed that small and medium sized businesses overall feel pessimistic about the current economic landscape. 69% of SME leaders think that economic conditions have significantly worsened over the last 12 months. Only 5% predict that the economic landscape will improve over the next year, while 72% strongly believe that the economy will further deteriorate.
INFLATION AND COST OF LIVING CRISIS
The latest figures from the Office of National statistics (ONS) have confirmed annual consumer price inflation reached 9.1% (June 2022). Vistage reports that more than a third (40%) expect their firm’s total fixed investment expenditures to increase during the next 12 months. Respondents attribute increasing costs to a number of variable factors including:
- Increased wages and compensation (86%)
- Increased energy prices (77%)
- Increased prices from vendors (70%)
- Higher costs for raw materials and other inputs (60%)
- Change in buyer behaviours (45%)
As a result, 76% of business leaders anticipate the price of their product and / or service to increase in the near future.
THE FUTURE OF WORK
According to the survey 57% of businesses leaders of small and medium sized businesses across the UK and Ireland have increased headcount, and a further 47% are planning to grow their head count in the next year. This is mostly (67%) due to labour shortages in meeting the current demand. In fact, one third (33%) observed a decrease in employee retention over the last year. What’s more, 67% of business leaders states that challenges in the hiring process has directly impacted their ability of operate at full capacity.
When looking at the future of work only a quarter (25%) of businesses have returned fully on-site post-pandemic, with a majority (67%) favouring a hybrid workforce model. Despite greater levels of flexibility most (76%) SME business owners are either unlikely, or very unlikely, to adopt the four-day work week.
Vistage found that senior leaders are conscious of the negative impact flexible working has on their workforce citing culture (58%), communication (56%) and collaboration (65%) as the biggest areas of concern.
Geoff Lawrence, Vistage’s UK managing director, comments on the findings: “While economic confidence continues to wane, British and Irish small and medium sized businesses remain as resilient as ever amidst record high inflation rates and labour shortages. We are seeing that many business owners require specific support as they weather the current storm and look towards growth and scalability plans.
Our latest CEO confidence Index survey indicates that businesses are looking at ways to reinvigorate their workplace culture, in a bid to tackle employee retention. As such we expect to see more senior leaders focus on employee collaboration and communication.”