The 2023 UHY Middle Market Survey Trends Report polled over 250 executives across the public and private middle market to identify key performance successes, challenges and priorities businesses may experience throughout 2023.
Key findings include:
• Companies are experiencing more post-pandemic growth than expected, with most returning to pre-pandemic growth trajectories and higher in some cases. While it is a positive sign to see that companies have rebounded from the shock of the pandemic, business owners will not have much time to rest on their laurels as new challenges are rapidly approaching and existing threats continue to impact operations.
• Heavy focus on growth, process improvement, and becoming more efficient. The advent of automated business processes supplemented by artificial intelligence is not fully realized, but companies are recognizing the importance of embracing technology and considering its role in helping business owners improve efficiency.
• The importance of environmental, social, and governance (ESG) strategy implementation should not be understated. Strategic deployment of ESG initiatives is still in its infancy. The adoption of ESG criteria is not currently a major component of overall business strategy. As we move forward, companies may find themselves scrambling to put a strategy in place as uniform reporting standards are established or required.
• Companies must improve their recruiting strategies to remain competitive for top job candidates. Existing employees should not be overlooked and are key players when looking to improve retention. The Great Resignation has completely reshaped the way potential employees approach the process of finding a job. More value has been placed on diverse workplaces, flexibility, feeling valued, expanded benefits, and more, beyond better compensation. Businesses will have to adjust to stay relevant.
• Significant barriers to digital transformation still exist, but companies are more interested in exploring it as a part of their strategy. There are countless benefits to adopting digital transformation, but companies are having trouble assessing their own needs and, in turn, having trouble selecting a partner for implementation. Companies must look deep within their processes and current technology capabilities to confidently identify those needs so they can select the right partner. Resisting change may only leave them further behind.
• Most companies turn to a combination of internal IT resources and third-party vendors to manage cyber risk. With increased connectivity comes vulnerability. Having a cyber assessment conducted by a third-party vendor can expose vulnerabilities never imagined and can also help you manage other cybersecurity components beyond the scope of your internal IT function. Tightening up cyber policies will be a key component of risk management. Cyber breaches could be lethal for any company, and the attacks are only becoming more sophisticated.
• COVID-19 and hyperinflation cause the most angst for business owners, but there are
countless other concerns on their radars. COVID-19 and hyperinflation were at the top of the list, but there are important lessons to be learned from both of these issues. In addition, the risk of recession, rising interest rates, climate change, the Russia-Ukraine conflict, and increased hawkishness by the Fed are also areas of major concern.
• Businesses are plagued by a multitude of supply chain issues. Looking beyond the first tier to the second or third may reveal some weak points in a business’s supply chain. A comprehensive evaluation of the supply chain may allow a business to identify those weaknesses and make improvements to prepare for future issues.
UHY is one of the nation’s largest professional services firms providing audit, tax, consulting and advisory services to clients primarily in the dynamic middle market. We are trailblazers who bring our experience from working within numerous industries to our clients so that we can provide them a 360-degree view of their businesses. Together with our clients, UHY works collaboratively to develop flexible, innovative solutions that meet our clients’ business challenges. Visit us at https://uhy-us.com/.
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