The Biggest Challenges Facing Leaders Now
Being a leader in 2022, whether that's a CEO, a recruiter or a manager, has come with a whole host of new obstacles to navigate. The world has undergone a significant change in the last few years, and on top of this, the way that workers think about their careers has changed.
There are more challenges for leaders to navigate and more opportunities for workers who are expecting more than ever from their employers. Consumer behaviour is changing, the way we communicate has changed, and issues surrounding inflation, supply chains, and recruitment are all bringing new and rapidly evolving obstacles to the table.
So, what does this mean for businesses, and how can you keep on top of everything?
A survey by McKinsey polled business leaders on what they believed their biggest challenges were. Surprisingly, just 4% of leaders mentioned the impact of COVID-19. Unsurprisingly, a quarter of respondents mentioned the recession and rising inflation as their biggest challenge this year. This was followed by 15% mentioning labour shortages and 13% mentioning wider supply chain issues.
Effects of inflation and the cost of living crisis on businesses
Inflation has hit historically astronomical rates, and it's not just affecting the cost of living. Inflation takes a huge toll on businesses, costing more to produce goods, run the business or even just keeping the lights on.
Many businesses have had to shut down, and those that are left are faced with the difficult choice of deciding whether to absorb the higher costs or pass them onto the customer at a time when they're also struggling with finances. Many customers can't afford to spend money anymore, which is leading to a dip in sales just when businesses need the money most.
People in positions of leadership are faced with massive challenges as they battle inflation and rising costs - it's vital to think about the bottom line and how costs can be cut, but there's only so much that leaders can change without also considering the unpopular route of redundancies.
In fact, inflation has been dubbed a major cause for the spike in unemployment rates, which has seen a steady increase throughout 2022.
Challenges in communication
Communication is one of the most important skills for leaders, and how we communicate has undoubtedly changed in recent years. Hybrid and remote working has seen a shift from face-to-face contact to emails and calls, which can make miscommunications much more likely. In addition to this, employees are much more aware of their mental health and how interactions with others make them feel.
It's not just communicating with employees that represent a challenge, either. One of the most commonly mentioned struggles for leaders is simply communicating with other senior individuals in the business.
Leaders are under an unprecedented amount of stress with much of it being concentrated in their division of the organisation which makes it difficult for leaders to see past their own issues when discussing matters of urgency.
While it's difficult to focus on communication when you're under stress, it's important to tackle issues head-on and set an example for other employees. Be willing to listen to what everyone has to say, regardless of seniority.
Let how others act to inform the way that you communicate - some people are naturally more timid and won't respond to bold and direct confrontation, whereas some people prefer to get to the point. Tailoring your communication style, being aware of yourself and the other person and showing that you're actively listening are the best ways to improve communication.
Recruiting new talent
Recruiting new talent has been a massive concern over the past two years, and this trend is showing no sign of slowing down. The skills gap - the gap between the jobs that need doing and the people that are able to do them - is widening, and the competition to secure top talent for your business is increasing.
Many older workers took the pandemic as a sign to go for early retirement. The pandemic also made some jobs much more difficult or no longer viable. Many hospitality workers were made redundant and used the pandemic to retrain and look for jobs outside of the industry. Many younger people became interested in entrepreneurship and started their own businesses.
Many factors have made it challenging to recruit new talent, but there are some things that employers can do to be more desirable to job seekers.
Leaders need to adjust their approach to recruitment based on changing trends in hiring practices, such as using virtual interviews. In addition, offering benefits like corporate mental health support, innovative employee engagement, and collaborative workplace culture are sure to attract new talent.
Challenges of remote working facing businesses and leaders
Remote working is the way of the future for many businesses and leaders. The benefits are clear - reduced expenses, increased productivity, and improved employee morale. However, remote work also poses challenges.
Employers need to understand that there is a disparity in workers' attitudes - some miss being in the office while others don't want to go back. Expect new talent to ask about home working and be ready to offer hybrid working as a minimum. Communication needs to be clear for home working teams, and they should be made to feel like a part of the business, as any office-based employee would.
Changes in consumer behaviour
Consumer behaviour is changing rapidly and has caught many businesses off-guard. Consumers are more demanding, informed and empowered than ever before. As a result, they are less loyal, have shorter attention spans, and are more dependent on technology.
Customers demand more transparency from businesses and expect them to take a stance on social justice issues. Consumers don't have as much money to spend either, which makes it more critical than ever to show that your product is worth the money.
The challenges that leaders face today are wildly different from 20 years ago. Communication, transparency, rising costs and talent challenges can feel like massive obstacles to overcome, but they're challenges that all good leaders should tackle head-on.