As many companies approach their financial year end Andrew Marsh, chair of Vistage North East and Northumberland, NED and entrepreneur, rounds up what the region's business leaders are likely to see in 2024, based on 2023's performance.
Andrew says:”The key reflections for 2023-2024 are heavily shaping what the financial year of 2024-2025 will bring in expectations, themes and challenges for business leaders.
“According to Vistage and their in-depth survey results, more than half of all business leaders (56%) in the UK and Ireland believe that the economic conditions in the country have either improved or remained the same since the last financial year.
“This, however, flies in the face of what was expected post pandemic and indeed what many predicted for their own business and the general economy. In part it can be put down to general faith in the future recovering and business as usual returning to sectors quicker than anticipated. It is also in part to do with the resilience plans that were put into action as companies were put under unusual and immense pressure.
“Looking back, we started 2023 with an energy price crises, a slowing in economic growth and inflation, and it did seem as though geopolitical tensions were easing. There was a feeling of positivity. Light at the end of what had been a very long tunnel.
“But as a recent McInsey report outlines, it seems that the business environment for many went the other way with uncertainty actually deepening throughout the year, in every sector. Some of this uncertainty allowed for growth of certain tech, and AI in particular started to gain a hold, although many are still approaching it with a sense of doubt and scepticism.
“The 2023 PwC survey stated that 47% of CIO’s prioritised the transformation of their data platforms to drive business growth, and a boom is building on the back of that, but this is leading to challenges, and that did contribute to the fact that 2023 saw new and intense encounters take hold that many responded to well, whilst others simply did not.
“Another side of the transformations of digital platforms saw the growth in Cyber-attacks – 27% of SMEs fell victim and it was revealed that only 60% have a regularly reviewed cyberattack plan in place. That alongside the increased impact of AI bringing the threat for jobs in the future caused unease, as did the pressure to achieve ROI for technology and training invested in to keep up with the competition.
“Return to office or continue to work from home decisions also took their toll – investment in office space or loss of team camaraderie and output levels became the debate topics at board level. Boards have also had Diversity, Equity and Inclusion as a main topic, with employers having to face the needs of their teams and their customers, which has weighed heavy on some in both time and cost.
“Despite all of those challenges, business leaders in the region are feeling positive about 2024 with 63% of Vistage’s members anticipating that their firm’s sales revenues will increase during the next 12 months, and 53% expect their profitability to increase too.
“There is a softer, more positive approach to cash due to elevated inflation and interest rates with a focus on consolidation and sustainability. Resilience offsetting those interest rates and higher input prices will become nonnegotiable as direct challenges will include: domestic and international economic and political issues (29%); rising inflation (9%); the digital transformation process (5%); sustained supply chain disruption (5%).
“2024 is the year that the majority of tech firms will be paying back CBILS on bounce back loans which add extra pressure.
“Another key theme for 2024 is people. 56% of Vistage’s UK members will be focusing on increasing the number of employees in their business – but they are aware that the talent shortage will continue. Due to this 29% of those surveyed are actively budgeting for larger pay rises in a bid to retain top talent and upskilling existing workers. It is expected that employers will have to offer creative benefits and reasons for talent to stay, for example, 4 day work weeks are likely to become routine. Mental health and wellbeing of workers must become a priority and senior leaders must ensure that all managers are good managers, skilled in conflict resolution to bed in teams and ensure a healthy culture.
“The use of AI will continue to grow but with a focus on using it to create more opportunity, not diminish it. Failure of development of AI platforms to the next level will come at cost to developers but also fuelled by the AI boom, data privacy regulation will need to accelerate too to be in line with GDPR.
“CFOs and COOs will need to become experts in cyber security and all teams will need to sharpen to ensure increasing productivity with what they have, to accelerate growth – CISOs. CTOs, and CIOs will become more critical in the journey to secure a bright future.
“In the main, organisations need to be and actually seem to be resolute to maintain a performance where they are operating with excellence. They also need to be focusing on continual improvement of performance to grow confidence on all levels, and if anywhere can do that, I am confident it is the North East.”
More information on Vistage can be found by contacting Andrew on Andrew.marsh@vistagechair.co.uk