The Executive Connection’s latest CEO Confidence Index has revealed over half of mid-sized organisations and SMEs actually expect to keep or increase their employee headcounts in the year ahead, without government help.
While the CEO Confidence Index has fallen by 60 per cent in the latest survey from 106 to 42, on the back of COVID-19 weakening businesses’ sales and investment outlook, half the CEOs surveyed have not changed the size of their workforce and do not expect to require access to the JobKeeper program.
According to the findings, one in six business leaders still plans to increase staffing levels in the year ahead, despite an overall increase in the number of firms expecting to reduce the size of their workforce — from 10 per cent in the March quarter to 44 per cent in the June quarter.
Of those that have been hit hard by the coronavirus crisis, one in five told the survey they have decided to retain or rehire employees as a result of the measures announced in the JobKeeper program.
“The past six weeks have seen businesses forced to reassess just about every element of their operations in line with public health orders. Despite the challenging external environment, leaders of mid-sized organisations have shown remarkable agility to reset their operations and continue to support customers and employees,” said Stephanie Christopher, CEO of The Executive Connection.
“Clever, confident decision-making has ensured leading CEOs are moving their people and businesses forward. Standing strong, our members are well positioned to deal with the challenging economic environment, to seek out new opportunities and innovate as needed to take advantage of the economic recovery ahead.”
Impacts on SMEs
Looking closely at the impacts of the coronavirus crisis on SMEs, the survey revealed that just under a third of CEOs (31 per cent) expect to see revenue declines of more than 30 per cent.
The biggest impact on business operations has come through sales, with a quarter of CEOs (24 per cent) describing the impact on sales as severe. Just over one in 10 (12 per cent) report that sales prospects are unchanged.
The next significant change is seen in investment intentions, with most firms putting investment activities on hold in the past month, and half of all businesses expecting to pull back on capital expenditure in the year ahead.
The survey revealed that business leaders are firmly focused on retaining employees, on the view that this downturn could be short-lived.
Almost two in five CEOs (37 per cent) report that COVID-19 has had no impact on staffing levels, while less than 8 per cent have described the impact on staffing levels as severe.
Government policy response hits the mark
Asked to evaluate the success of government measures, some 79 per cent of CEOs agreed that the COVID-19 policy response by state and federal governments has been appropriate.
When asked if governments should have done more or less to ensure that businesses survive the period of lockdown, 77 per cent said they believe that policymakers have got it right, 18 per cent suggested that more could be done and only 3 per cent of CEOs said the governments should have done less.
As for the federal government’s headline measure, the JobKeeper program, the majority of CEOs said they would like to see it phased out gradually, with only 12 per cent of CEOs favouring the government’s hard-stop to the wage subsidy in September 2020.
The Executive Connection CEO Confidence Index saw 214 CEOs from a diverse range of industries across all mainland states of Australia share their views between 3 and 15 April 2020.