UK businesses are cautiously optimistic as they look towards 2024, with a nearly even split on how it compares to 2023.
- Half of the businesses expect 2024 to be less challenging than 2023, though financial obstacles remain.
- Companies are setting ambitious goals, particularly in cash growth, despite only a fraction feeling confident about financial management.
- Many businesses lack clarity in spend management, impacting their financial decision-making processes.
- Decisions such as salary reviews and office returns are shaping workforce dynamics for the incoming year.
According to recent research involving over 500 financial decision makers, approximately half of UK businesses anticipate 2024 to be less challenging compared to 35% who foresee a tougher year. This shift in perspective is marked by a 20% drop in inflation concerns since 2023, motivating businesses to pursue more ambitious targets. The primary focus remains on cash growth, with a 163% surge in enterprises targeting this goal.
Interestingly, while cash growth is the focal point for many, only 25% of organisations are confidently managing their expenses. Merely 28% have a comprehensive understanding of their financial health, with this percentage plummeting to 13% for larger businesses with 250-499 employees. A significant hindrance is the lack of clear differentiation between expenses and spend, with only 24% providing explicit guidelines to their financial teams.
This ambiguity in spend management results in inadequate tracking, leading to disparities in financial visibility. Consequently, over half of the businesses overlook expenditure items until they reach the £10,000 mark. Thorbjørn Fink, COO of Pleo, highlights that comprehensive visibility into all outgoings is imperative for achieving revenue growth and savings targets.
Amidst these fiscal challenges, organisations are opting for strategies that might influence their workforce. Specifically, 20% contemplate salary reductions for remote workers, affecting a segment of the workforce, while 41% plan to increase office presence. These decisions are driven by industry trends and derived insights from employee feedback.
Nevertheless, the outlook for staffing is promising as only 25% of companies anticipate reducing their workforce in 2024, a significant improvement from the previous year’s 42%. Moreover, there is a notable 27% rise in hiring viability, offering a positive aspect amidst economic adjustments.
While UK businesses look forward to an easier 2024, addressing financial visibility and management remains crucial.
