Business team meeting at conference table
This year was supposed to be more difficult. Inflation was expected to dampen customer spending. A recession was imminent. You wouldn’t have been crazy to think that supply chain issues could once again come between you and your toilet paper.
With the job market and economy looking a little better than expected, some economic watchers are beginning to adopt a “soft landing” narrative. The prospect that inflation can be slowly brought under control without plunging the economy into recession means business leaders need not operate in full crisis mode.
But that doesn’t mean all is well either. Here are some of the top challenges facing business leaders today and how to start tackling them.
1. Coexist with economic uncertainty
While the economy is not as bad as many had expected, the unpredictability has brought unexpected challenges. Consumer behavior is not in line with economists’ projections. People keep spending, even when the best forecasting tools say they shouldn’t. When they spend, they choose low prices over brand loyalty, which makes predicting demand even more problematic.
As a result, managers don’t know when to cut prices or raise them. Meanwhile, layoffs are mounting at companies like Spotify and Amazon, even as the healthcare, hospitality and retail sectors continue to suffer from labor shortages. In short, no one really knows what’s going on, and consumers may be losing trust in their favorite companies.
The companies that will thrive in the second half of 2023 will be those that act cautiously but flexibly. They will take cost cutting seriously and adjust prices accordingly, but not drastically. They will streamline their organizational structure, ideally while avoiding mass layoffs.
Perhaps most importantly, successful management teams will communicate clearly and transparently with employees and customers. The uphill battle for consumer confidence will continue for years to come. Justifying what may seem to be erratic decision-making will be an integral part of any business’s survival strategy.
2. Manage remote work and retain top talent
Working from home isn’t the mess it was in 2020 anymore. But telecommuting and hybrid office layouts continue to pose challenges in the workplace.
According to Forrester, 40% of companies will attempt to end work-from-anywhere policies in 2023. The consulting giant estimates that the push towards AI monitoring of remote worker productivity will drive more half of WFH employees looking for a new job this year. .
These new corporate policies regarding remote and hybrid work will erode workers’ trust in their employers over time. And with continued turnover and morale issues, employee perception of their company matters more than ever.
Business leaders will have to find ways to keep employees happy or risk them leaving, as voluntary turnover continues unabated. Retaining talent starts, whenever possible, with better salaries and benefits. A better corporate culture can also make a difference.
Management teams should survey employees to gauge employee engagement or, better yet, schedule one-on-one interviews to gather information. They should look for other ways to keep employees motivated, especially in the form of growth and learning opportunities.
3. Ward off security threats
In 2022, the United States recorded 1,802 data breaches, affecting 422 million people. Data breaches will continue to be a significant business concern, especially as remote working is likely to further complicate cybersecurity. Employees will work on less secure connections or take equipment out of the office, exposing it to outside threats. Many will access sensitive work data from their phones, which are more vulnerable to hacking attempts.
AI will also pose growing cybersecurity threats as hackers use generative AI to create sophisticated scams. But the disease could also be the medicine: AI and machine learning can alert companies to irregularities such as attempted breaches.
Companies will need to update their security protocols to prevent cyberattacks. This includes everything from installing robust cybersecurity software to training employees on how to avoid phishing scams. They will need to invest in the right tools for the job and in training workers with access to personally identifiable information.
Smart leaders will take cybersecurity very seriously and implement contingency plans before a crisis occurs. They will adhere to strict authentication protocols and carefully limit employee access to sensitive data. They will know what steps to take in the event of a violation and how to notify the public.
Restore Reliability
The unpredictability of the past three years has changed the behavior of employers, employees and customers. This is why it is imperative for modern businesses to offer a greater sense of reliability and transparency.
Customers need to know that companies will provide consistent quality and value. Workers must believe that their employers will help them grow. And everyone—customers, employees, and employers—needs to be confident that their data is safe from attack.
The businesses that will thrive in the months and years to come will be those that offer a sense of security and stability. They will act in a way that lets their employees and customers know that they can count on them no matter what. And they will make a name for themselves by giving people in these uncertain times something to cling to.