The economic tailwinds are blowing strong for small and midsize businesses in Wisconsin and across the nation.
While national sentiment remains near record levels, optimism in Wisconsin is surging, according to the Q1 2018 Vistage CEO Confidence Index. Sixty-four percent of CEOs of Wisconsin’s small and midsize businesses believe the economy has improved from a year ago. One-third believe the economy will continue to improve into 2019, and 56 percent think it will continue at current healthy levels.
Their high level of confidence translates into growth. Eighty-five percent anticipate increased revenues over the next 12 months. That compares to just 79 percent nationally. Increased top line revenue flows through the balance sheet for most, as 69 percent expect increased profits, as well.
These are exciting times for those CEOs prepared and positioned to capitalize on the best market conditions in a decade.
While growth is good, it does present CEOs with significant decisions. Scaling your business to support new customer demands while maintaining your existing customer base puts tremendous pressure on the entire organization. Growth requires increased investments in talent and operations.
More than one company has come to realize that they cannot capitalize on the tailwinds. A manufacturer lamented recently that the company could easily access capital at historically low rates to expand capacity but couldn’t find workers to operate the equipment.
Talent management has emerged as among the top decisions facing CEOs. In Wisconsin, 69 percent plan to increase headcount over the next 12 months. An expanding pool of opportunities for workers, with fewer workers available to fill them, has quickly forced CEOs onto the front lines of the talent wars.
Of those that are hiring, 17 percent of Wisconsin CEOs surveyed are planning on hiring in the second quarter of 2018, while the majority, 62 percent, plan to hire steadily across the year. Competition is fierce for talent across all levels of business, from front-line resources to executives. CEOs have no choice but to recruit talent from other companies, and that’s a door that swings both ways.
Top 3 strategies to win the talent war
In anticipation of this year’s talent wars, Vistage CEOs from across the country identified their top three strategies to compete and win:
1. Develop existing workforce.
Eight-five percent of Wisconsin CEOs identified developing their existing workforce as a top strategy. Employee engagement has emerged as a critical new metric. Engaged employees are not only more productive, but also more likely to stay. Increased investments in training and development allow employees to continue to improve and evolve.
2. Boost wages.
Eight-seven percent of CEOs identified boosting wages as another key strategy. It’s easy to see how competing on income can be an advantage in recruiting new people. But it also carries a huge impact to the existing workforce when employees feel valued and rewarded.
The time to increase wages is before the recruiter calls. It’s usually too late to offer a salary match or increase after they’ve told you they’re leaving. By then, they’ve already emotionally checked out.
3. Add employee benefits.
Like boosting wages, great benefits can be a competitive advantage when recruiting new people. Health care, vacation days or even development days are all attractive to potential new hires. Also, increasing benefits for the current team is a force multiplier because members feel more security and a greater sense of loyalty.
Losing the talent war will have serious repercussions for small and midsize businesses. Extended fulfillment and delivery times will negatively impact customers, resulting in lower satisfaction. Reducing sales or marketing investments immediately affects top-line revenues.
A good offense begins with a great defense. Evaluate the competitiveness of your salaries and benefits so your people can’t be lured away with things money can easily solve. Make investments in training and developing your people a priority. The reward will be in higher employee performance.