Has power in the labor market finally shifted back to employers? Recent headlines might make you think so, but Chief Executive’s latest survey of U.S. CEOs tells a more nuanced story. In fact, most CEOs we polled say retaining and engaging employees will be their top priority in 2024 as unemployment remains stubbornly low—and skilled employees remain hard to find and difficult to keep.
CEOs surveyed at the start of January were asked to select their top priorities for 2024 and 60 percent said retaining and engaging employees is their top priority—a even higher proportion than the 57 percent who ranked retaining and engaging employees as their top priority two years ago, the last time we did the survey.
“I strongly believe if we had more middle-to-higher-level employees we could expand our business and be more profitable,” says Richard Duncan, president of Richard Duncan Construction, echoing the sentiments of many of the 197 surveyed CEOs.
The second most important priority for the CEOs who responded to our survey? Improving cost structure (including scale, process improvements, etc.) at 56 percent. This ranked third in 2022, at 37 percent.
Asked about their biggest challenges for the year ahead, 59 percent of the surveyed CEOs say inflation will remain the biggest challenge, unchanged from 2022, though 72 percent of CEOs ranked it as their top challenge that year, followed by supply chain disruptions.
“I expect falling interest rates this year to improve business,” says Karim Chichakly, co-president at Isee System, Inc, a system software company. “On the other side, inflation is proving more resilient than expected.”
Retaining and engaging employees comes in second, with 41 percent of CEOs selecting it as a top challenge. Recruiting workers ranks third, at 40 percent. Worth noting: This pattern holds true regardless of size the company (by revenue).
A Look Ahead by Industry
There is some variation across industries. For example, 79 percent of CEOs in tech selected gaining market share as a top priority for 2024, compared to only 53 percent who selected retaining and engaging employees.
For CEOs in industrial manufacturing, improving cost structure is the top priority for 2023, according to 64 percent of them. Gaining market share is the second most selected priority for these CEOs, at 61 percent.
But for CEOs in almost every other sector—including construction, government, non-profit, healthcare and professional services—retaining and engaging employees remains a top priority for 2024.
When it comes to challenges for the year ahead, CEOs across most industries put inflation at the top of the list. However, for those in government/non-profit, 78 percent said that recruiting people for open positions is one of the biggest forecasted challenges of the year and 60 percent of CEOs in construction said the same. CEOs in consumer manufacturing are also focused on employees, with 64 percent listing retaining and engaging employees as a top challenge in 2024.