Vistage CEO Confidence Index Survey Reveals 79% of CEOs are Investing in Company Culture and Employee Engagement to Drive Productivity
SAN DIEGO, Oct. 17, 2024 /PRNewswire/ — Small and midsize business (SMB) CEO confidence increased in Q3 with the Vistage CEO Confidence Index rising to 85.1. Responses were captured in a survey conducted by CEO coaching and peer advisory organization Vistage just before the Federal Reserve announced interest rate cuts. The Q3 results marked a modest rise from the previous quarter, though below the 2024 high of 85.9 and significantly below pre-pandemic levels.
Despite the slight uptick in confidence, challenges that impacted businesses in the first half of 2024 persisted into the third quarter. While inflation has decreased gradually, the costs of goods and services remain elevated. Interest rates started to fall; however, 60% of CEOs indicated that they do not expect these cuts will impact their businesses until 2025. Hiring has become easier for more SMBs, and employee retention rates have stabilized as workforce velocity slowed.
“Another quarter has passed with only incremental movement in CEO sentiment. However, there is new light at the end of the tunnel: interest rate cuts,” said Joe Galvin, Vistage’s chief research officer. “CEOs are homing in on productivity to navigate ongoing economic challenges. Following the Federal Reserve’s recent cuts, there’s optimism that businesses can invest strategically in efficiency and innovation, setting the stage for sustainable growth and enhanced workforce engagement. The organizations best positioned for success are preparing for the anticipated growth cycle in 2025.”
Vistage has measured SMB CEOs’ sentiment on various economic and business factors every quarter since 2003. Analysis using ITR Economics’ rate-of-change methodology has revealed the Vistage CEO Confidence Index to be a leading indicator of the U.S. Industrial Production Index nine months in advance.
Lauren Saidel-Baker, CFA and economist at ITR Economics, emphasized the need for strategic planning, noting, “Efficiency is the name of the game in today’s economic climate. Businesses must ensure that their investments are strategic and purposeful rather than reactive. Leveraging AI and automation can provide a significant advantage, helping organizations stay ahead of the curve.”
Q3 2024 Vistage CEO Confidence Index highlights include:
CEO economic pessimism eases following interest rate cut.
- Nearly one-third (32%) of SMB CEOs expect the economy to improve in the next 12 months, the highest level since the pandemic, while only 23% expect it to worsen.
- 30% of CEOs indicated they would feel the impact of a quarter-point (12%) or half-point (18%) interest rate cut.
- Most said they would need an interest rate cut of either a whole point (31%) or two percentage points (14%) to see the impact on their business.
- When asked how long it would take for their business to realize the effect of an interest rate cut, 23% reported less than three months, 28% reported 3-6 months, 23% reported up to one year, and 9% reported more than one year. (Note: Vistage collected this data immediately before the Federal Reserve’s interest rate cut announcement).
Increased focus on employee productivity and engagement.
- Nearly 8-in-10 SMB CEOs (79%) are investing in company culture and employee engagement to drive productivity.
○ Other top tactics to drive productivity include investments in:
■ Workforce development, including skills development for staff (77%) and leadership development (75%)
■ Process refinement and efficiencies (77%)
■ Automation (55%)
■ AI (40%)
- 37% of CEOs report increased productivity over the past 12 months, while 12% report declines.
Upcoming election concerns among CEOs.
- 19% of SMB CEOs have changed business decisions or investments due to uncertainty about the upcoming election, with 16% delaying plans and 3% accelerating them.
- When asked how their company is addressing the forthcoming election:
○ 40% are promoting a safe and respectful work environment.
○ 33% are encouraging employees to vote.
○ 9% are restricting political materials in the workplace.
○ 4% are training employees on managing customer commentary.
CEOs remain conservative on investments and hiring.
- Just over one-third (34%) of SMB CEOs are planning to increase fixed investments during the next 12 months. (Note: Vistage collected this data immediately before the Federal Reserve’s interest rate cut announcement, which may influence future investment decisions).
- Half (50%) expect to increase hiring in the year ahead, with only 9% planning workforce reductions.
- 38% report it’s easier to fill job openings compared to the start of the year, while only 10% report it’s more difficult.
- 91% indicate employee retention rates have improved or remained stable in 2024.
See the full results of the Q3 2024 Vistage CEO Confidence Index at vistage.com/ceoindex.
About the Vistage CEO Confidence Index
Established in 2003, the Vistage CEO Confidence Index surveys small and midsize business CEOs, presidents, and business owners about the U.S. economy every quarter. The Q3 2024 Vistage CEO Confidence Index includes responses from 1,626 U.S. CEOs surveyed between September 3 and 17, 2024. Using ITR Economics’ rate-of-change methodology, analysis has revealed that the Vistage CEO Confidence Index is a leading indicator of the U.S. Industrial Production Index 9 months in advance.
The Vistage CEO Confidence Index is recognized as the definitive voice of high-performing, high-integrity small and midsize business leaders. As a trusted resource, the Index provides world-class insights to inform decision-making for CEOs and other key leaders of small and midsize businesses.
About Vistage Worldwide, Inc.
Vistage is the world’s largest CEO coaching and peer advisory organization for small and midsize businesses. For more than 65 years, we’ve been helping CEOs, business owners, and key executives solve their greatest challenges through confidential peer groups and one-to-one executive coaching sessions. Today, more than 45,000 members in 35 countries rely on Vistage to help make better decisions for their companies, families, and communities. The results prove it: Vistage CEO members grew their annual revenue on average by 4.6% in 2020, while non-members with comparable small and midsize businesses saw revenue decrease by 4.7%, according to a study of Dun & Bradstreet data. Learn more at vistage.com.
SOURCE Vistage Worldwide, Inc.
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