2023 Business Outlook
“We should all be ecstatic, but we’re concerned!”
That was the summary expressed by a participant of a recent CEO roundtable—and may represent the economic outlook for the Midwest for 2023! A little background ...
During the roundtable, the group of CEOs went around the room talking about expectations for 2023. Most had positive expectations for 2023 … just not quite as high as 2022. When one said they thought 2023 would be a down year for them, someone asked him to explain. His answer? We were up 11 percent in 2022, and we are only budgeting to be up 7 percent in 2023.
Suddenly an increase of 7 percent is a down year because the previous year was 11 percent! Add to that, many of the manufacturers in the room are still managing backlogs of 3, 6, and 9 months, meaning there is work in the pipeline. The conversation ended with, “We seemed determined to talk ourselves into a recession.”
If there is one thing that employers hate, it is uncertainty. And the world, the business environment, and the economy are overflowing with uncertainty.
Talent. Baby boomers retiring, younger and less experienced leaders being placed into key positions faster than usual, challenging demographics, generational diversity in the workplace complicating communications and expectations, and remote work changing the employee/employer relationship cause ambiguity. The shortage of workers has put employees in charge of the market, and companies are having to be innovative in pay benefits, corporate culture, and workplace flexibility in order to attract and keep the best and brightest.
Supply Chain: Second to fears about finding the right people, the supply chain black cloud still lingers, though most companies are more optimistic for 2023. There are still hiccups, bumps, and certain products and raw materials that are disrupting the smooth flow of production.
Politics and World Events: Politics seem to be ongoing, 24/7/365, without a break from campaigning, and world events seem to change with every 24-hour news cycle. That keeps every business with one eye on their operation and one on the impact of domestic and international activities.
Pay and Benefits: Total rewards has become a new kind of differentiator in talent attraction and retention. Not necessarily just “more or better,” but “different.” “It’s not a benefit if I don’t think it’s a benefit!” Employees are looking for different things in their benefit packages and employers are adjusting to attract and retain talent. Student loan payments have become popular; flexibility in shifts and hours has almost become a given; and remote work has been embraced by many as a differentiator in the workplace, and it is free! But it means more work and more individualization, and sometimes more cost.
Generational Diversity: The exit of so many baby boomers has resulted in a rapid changing of the guard at many businesses. Leaders take over at 35 instead of 55 without the benefit of years of watching others make mistakes and learning from those experiences. Now employers must focus on their bench strength and develop clear paths for advancement for their emerging leaders. They are providing more exposure to senior leadership, offering formal mentoring programs and career support. At the same time, companies are utilizing the incredible strengths of the younger workers in areas like technology, including software, programming, integration, drones, and gaming. Younger workers are taking the lead in social justice, social media platforms, and public presentations as well.
Other uncertainty on the horizon around interest rates, the expense of automation and technology, accurate data, cybersecurity, and market volatility are still reasons for concern. However, on the positive side, employers learned from the chaos of last year and have begun to settle into remote work options, new talent strategies, different ways at looking at benefits, and helping employees achieve work/life balance.
So, there is the good news. Maybe 2023 won’t be as chaotic as 2022!