Small business owners are concerned about how inflation will affect their business growth. However, other economic trends are at work which will affect businesses of all sizes as well, including mass layoffs in some industries such as tech and banking, continued supply chain disruptions that have not returned to pre-COVID levels, regular interest rate hikes, and the wave of quitting during and after COVID that was called The Great Resignation. While there is optimism that the economy can sustain a soft landing and avoid a major recession, businesses are still facing economic challenges for the remainder of 2023.
Changing Times
Some businesses may need to be prepared to pivot into offering newer goods and services, to change how they offer those goods and services, or to change how they operate internally. Technological advances are at the heart of many of these changes. While much of the world is abuzz about the promise and pitfalls of artificial intelligence, many other types of tech can transform the workflow. In fleet management, this comes with tools such as telematics. Wireless dashcams are another innovation that offers more storage capacity and speedier footage access. The wireless cams differ from wired cams in significant ways that should be researched before a company makes a final purchase.
Challenges Ahead
However, it is also important that businesses moving into a new area understand what they are heading into and that it’s something that their customers want or that they can attract new customers who want it. Perhaps nowhere is this typified so much as in the disastrous launch and collapse of CNN’s streaming service after just one month. From its first day on March 29 to its last day just a month later, it only attracted around 10,000 viewers daily, despite spending $300 million in development and hiring big names to helm it.
Several factors contributed to the failure of the streaming service, but it ultimately sounded a cautionary note for businesses eager to jump into whatever seems new and profitable. With single personalities able to garner millions of views or listens for their video streams or podcasts without corporate backing, the success of a major news network must have seemed almost a foregone conclusion. However, in a fast-changing economic and consumer landscape, businesses face the challenge of adapting and figuring out what adaptations are right for them.
Worker Engagement
Along with the Great Resignation, another buzz phrase that has dominated talk of employee behavior, even among those holding high paying in demand careers is quiet quitting, a substantial majority of workers are unengaged at work. Many report that their primary reason for working is to make a living and that they are not personally fulfilled by what they do. This challenge represents an opportunity for businesses if they can identify how to get workers more engaged beyond the promise of a paycheck. Creating a workplace that can offer fulfillment alongside a salary can put those businesses on a path to attract a larger pool of candidates for open positions. They will also be able to retain more of their existing employees.
Hiring Increases
The flood of workers leaving their jobs meant better benefits and higher wages for those remaining as employers struggled to fill positions and fretted about wave after wave of resignations. However, while some industries are continuing to struggle with recruiting employees, and younger workers in particular, the Great Resignation is widely considered to have ended. High-profile layoffs in large companies, especially for white-collar workers, has led to some skittishness about those companies, but this is unlikely to affect smaller businesses and other industries. In education, manufacturing, construction, food services and health, jobs are growing, but unemployed workers in marketing, software engineering and human resources may need help finding jobs. However, this means businesses in those industries will have a deeper bench of applicants to choose among.
The European Situation
Another piece of bad news for some businesses is Europe’s recession, thanks to Eurozone inflation. While the second quarter in a row of contraction in the economy is said to be mild and survivable, the rest of the world will still feel its effects, including the United States. Although it is currently unclear how widespread the current economic setbacks will be, Europe is not on track for a crisis on the scale it experienced in 2012.
The Good News
There is good news in a decline in inflation in May. Both consumers and investors appear optimistic about a continued decline for the remainder of the year. There is a delicate balance between inflation, wage increases and low unemployment, but it appears that for now, the latter two will not drive higher prices, at least right now.
