Confidence among CEOs in the second quarter of 2021 has risen to its highest level in three years, according to the Vistage CEO Confidence Index, which measures sentiment on various economic and business topics among small and mid-sized business leaders.
Despite the Vistage CEO Confidence Index rising to 108.8, many business leaders are faced with hiring challenges following the pandemic.
While 71 percent of all CEOs reported they intend to increase their workforce, the record high since the Index started in 2003, 62 percent said that hiring challenges are impacting their ability to operate at full capacity.
Compounding this, almost a quarter (24 percent) say their employee retention rates have decreased since the beginning of the year. Companies report current employees are leaving for higher wages (38 percent), better career development opportunities (18 percent) and increased flexibility (14 percent).
To combat hiring challenges, 56 percent of CEOs are boosting wages, and half of CEOs are developing their existing workforce. Sixty-five percent are investing in technology to reduce their labor burdens, and more than a quarter (27 percent) are investing in automation and other labor-saving devices to get their jobs done.
“With restrictions easing across the country, businesses are eager to get back to full capacity; however, the talent wars have flipped in favor of the employee, and they can bargain more for what they want,” said Joe Galvin, chief research officer at Vistage. “So, while many companies are looking to increase their workforce, they also need to take a step back and see how they can incentivize their current workers to stay. Flexibility is a must for many workers. A dual recruitment-plus-retention strategy is critical now.”
When asked about their return-to-work plans, 70 percent of CEOs say they will have a hybrid workforce through the end of this year. Almost as many (68 percent) say hybrid working will remain in place beyond 2021. In terms of masks and vaccinations, 59 percent are not requiring masks in the workplace and 49 percent are recommending, but not requiring, that employees are vaccinated. In addition, 67 percent have resumed business travel.
