As we step into the third quarter of 2023, businesses are still grappling with economic uncertainty, scarcity of labor, and disturbances in the geopolitical landscape. The burning question on the minds of business leaders is:  “How can we drive growth amidst challenging circumstances?” What are your top business challenges of 2023?

With the recent increase in the benchmark interest rate by the Federal Reserve on May 4, 2023, the lending and debt costs have reached their highest level in over 15 years. This surge in costs, along with the rising prices of materials, supplies, and labor, has led 93% of U.S. business leaders to anticipate an upcoming recession within the next 12-18 months. Although opinions differ on when it began and how long it will last, the Q1 2023 CEO Confidence Index reveals that 86% of CEOs believe it will be a “brief and shallow” recession with limited global impact. Regardless of its duration, businesses must take proactive measures to prepare themselves for the challenges ahead.

As business leaders evaluate their operations, they are strategically determining where they can reduce expenses. A significant 41% of Finance Executives have identified M&A as the first area to cut, while 39% are focusing on sustainability and environmental upgrades.Despite facing staffing shortages, these leaders are committed to retaining their top talent and are actively taking measures to support them.Interestingly, 45% of executives are postponing budget cuts to technology that enhances efficiency. This decision is understandable as the quest for efficiency often goes hand in hand with cost-cutting initiatives. However, a staggering 80% of executives are recognizing the importance of investing in digital technology to counterbalance economic, supply chain, and talent challenges.

Concerns surrounding corporate tax planning persist as the current administration undergoes a transition. Business leaders are carefully considering the potential outcomes of tax policies. According to PwC, a substantial 67% of companies are gearing up to tackle the business implications brought about by changes in tax policies and regulations. Should there be revisions to the tax structure, companies at the national level will immediately feel the impact, particularly in the form of increased corporate taxes.

The challenges in the supply chain have caused a surge in material costs and a decrease in inventory levels for numerous companies. Although efforts have been made to acquire products, supply and material expenses remain significantly high. However, effectively managing inventories and costs is only part of the equation. Many companies are now reviewing their pricing strategies as well. Surprisingly, more than half of CEOs have already implemented price increases, and an additional 29% are planning to do so within the next 12-18 months. This comes as no surprise, considering that companies are also facing increased labor costs alongside material expenses.

Businesses are well aware of the need to continuously adapt and grow. Technology plays a crucial role in driving this evolution forward. Having access to relevant data is vital for effectively managing operations. However, it is concerning to note that only 35% of treasury professionals claim to have complete visibility of their operating bank accounts. Such blind spots not only hinder cash flow management but also leave room for fraudulent activities.On a positive note, CFOs recognize the significance of data and technology and the need for significant changes. According to Accenture, a whopping 76% of CFOs believe that consolidating disparate data is essential for achieving business objectives.

Talent acquisition and retention will continue to be a top priority for CEOs this year, with 54% of CFOs in a recent Gartner survey ranking it as their most challenging task in 2023, surpassing forecasting (36%) and identifying cost-cuttingopportunities (35%).Recognizing the high costs associated with acquiring new talent, business leaders are now placing a greater emphasis on retention strategies. They are proactively adjusting salaries to keep up with inflation, providing opportunities for remote work, and taking into account the importance of time off.

Challenges and Change = Opportunities

Each year presents new opportunities and obstacles. In today’s ever-changing world, organizations must embrace change to optimize efficiency, constantly innovate, explore new strategies to capture markets, and consistently enhance processes and products. Irrespective of your industry, customers expect you to stay ahead of the curve. Failure to do so will prompt them to seek alternative suppliers.The truth is, if you don’t continually adapt, you risk falling behind. This necessitates everyone within your organization to embrace change. It is your responsibility to lead by example, guide them through the journey, and empower them to overcome obstacles while setting ambitious goals.Wayne Dyer once wisely said, “If you change the way you look at things, the things you look at change.”Prepare yourself for the next wave of transformation! REMEMBER: With challenges and change come OPPORTUNITIES. GET READY FOR THE NEXT ROUND OF CHANGE!