Workforce issues loom large, while sustainability becomes a mainstream concern.
People, purpose, prices and productivity emerged in a recent Gartner survey as key issues for the C-suite in 2022, and looking to 2023, reflecting a radical shift in priorities not seen in 15 years but likely to represent enduring change in the mindset of CEOs.
In 2022, the Gartner CEO and Senior Business Executive Survey showed that, catalyzed by multiple macro trends and economic factors, business leaders are reprioritizing some key areas of enterprise purpose and management focus.
The Gartner survey polled more than 400 senior business leaders about their 2022-23 priorities and technology-related thinking. (Participants span industries outside the tech sector and commercial, revenue-pursuing organizations.)
Key trends in leadership thinking
Among the top 10 priorities in this year’s survey:
- Growth remains the most-often cited priority(51%) but has faded this year. Gartner analysis ties this decline to the impact of supply chain problems as CEOs may not push so hard to drive up demand if they cannot supply.
- Technology-related issues,such as digitalization, e-commerce and cybersecurity, come in second (34%). For CEOs, the pandemic highlighted the value of remote work, e-commerce and other digital mechanisms. They are prepared to maintain their tech focus.
- The priority of workforce issues, such as talent retention, hiring and diversity, equity and inclusion(DEI), rose substantially for the second year in a row, putting it in a close third place (31%) and significantly ahead of financial issues, such as profitability, cash flow and capital funding, and the corporate initiatives, such as M&A, strategy change and restructuring.
- Environmental issuesemerged in ninth place; 9% of respondents cited it as a top-three priority. That may be a relatively small absolute number, but this is the first time the category has ever cracked the top 10 and reflects a very significant increase in interest. (It was in 14th position just three years ago and 20th position seven years ago.) Business leaders are now under pressure from customers, investors, regulators and employees to do more on environmental sustainability, and sustainable business is seen as an opportunity to drive business efficiency and revenue growth.
- Inflation is a sudden-onset issue for many CEOs,with 62% reporting in 4Q21 that they expect it to be a persistent or long-term concern. At that point, pandemic-induced supply chain shortages and government social expenditure to assist people through lockdowns and furloughs was driving inflation. Russia’s invasion of Ukraine and the resulting economic sanctions have since exacerbated the situation. Disrupted supplies of commodities from the region, such as oil, gas, grain and neon, will drive up prices in a range of industries, from restaurants to semiconductors.
Workforce issues emerge as a post pandemic focus
The combination of societal trends around DEI and the social attitude effects of the pandemic have led to a set of workforce issues important enough to warrant a high amount of the CEO’s attention. Attracting and retaining talent is the main consideration within the workforce sphere — 15% of senior executives, up from 8% last year, cited it as one of their top-three concerns.
Technology roles could be an important segment in which to test talent development strategies. IT staff and business technologists are some of the hardest employees to recruit and retain. It makes sense to trial and develop your leading-edge talent management ideas with this group first.
Hybrid and remote work is seen as the most significant change
The COVID-19 pandemic has brought a lot of employee-related issues to a head. The top response (55%) called out remote and hybrid working, outweighing all others combined. CEOs see employees’ desire for remote and hybrid work as the biggest behavior shift postpandemic, and CEOs main hybrid-work concerns are culture and productivity.
We know from our interviews that CEOs are hesitant and concerned about how this new working arrangement will play out in practice. It may have been a short-term necessity during the pandemic, but some remain reluctant to make it permanent.
Workforce concerns rose substantially between the two periods in which the survey was conducted, with resignations considered a significant issue by 48% of respondents in 4Q21, up from 34% in 3Q21. Overall, 49% of CEOs agreed with the statement that “it is very difficult for us to find and hire the kind of people we need in our business.”
(The author Mark Raskino, Distinguished VP Analyst at Gartner and the views expressed in this article are his own)