As Covid-19 becomes endemic, business leaders wrestle with the challenge of achieving profitable growth amid spiralling costs. At the same time, they invest in projected growth drivers this year.
2022 is characterized by headwinds and tailwinds. Professional services firm PwC reports that C-suite executives believe economic growth will continuously recover to pre-pandemic levels but inflation will remain as an inhibitor.
Inflation is a 40-year high and to manage this dilemma, 62% of business leaders say they will pass along price increases to consumers. Talent shortage will persist, for more than 3 quarters 77% of executives say that staff retention has been critical to growth. Almost half or 48% of respondents say that the struggle to find the right people is the greatest risk to hitting growth targets. Supply chain risks will loom over businesses. 32% of business leaders say they foresee continued supply chain disruptions. So, most firms are exploring alternative sourcing strategies to ensure continued flow of supply.
Despite the challenges, executives are upping their investments in major growth opportunities this year.
As talent shortage continues to threaten business growth, 62% of executives are investing in compensation increase through bonuses and cost-of-living adjustments and 56% say they are changing processes to address labor shortages. Adopting digitalization is expected to accelerate progress as well.
42% of the surveyed executives say they are prioritizing digitalization. Digital capability is at the heart of execution, executives say, whether it’s increasing supply chain resilience, rolling out new products and services for consumers or shifting to investor-grade environmental and social governance (ESG) reporting in preparation of new disclosure requirements.
Overall, c-suite executives have a very high sense of optimism in 2022 in terms of growth. It is a year that posts challenges to tackles all while presenting opportunities for growth and preparation for the new way of handling and making business grow.
To summarize, PwC presented the growth drivers of 2022 through 4 Ts:
- Talent – increasing attractiveness of jobs
- Transaction – new ways to simplify business processes through digitalization
- Transition – easing into future-forward work arrangements while incorporating automation and artificial intelligence
- Trust – more than ever creating an ethical business becomes an asset for trust building with customers and stakeholders