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CEO Optimism for the Long-Term Future is on the Rise

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New survey focuses on world events, employee satisfaction and shifting work culture

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Optimism among mid-market CEOS is on the rise, with nearly twice as many rating their outlook a “10” compared to two months ago, according to a recent CEO survey from Marcum LLP and Hofstra University’s Frank G. Zarb School of Business.

The percentage of CEOs who rated their business outlook a “10” (on a scale of 1-10) rose from 9% in Q1 2022 to 16% in the latest survey, which was conducted in Q2 2022. Those who rated their business outlook an 8-10 also increased, from 37% to 42%.

While overall optimism went up, there were substantial differences among sectors. Optimism at the highest levels (8-10) was driven by large increases among CEOs in financial services and financial institutions, professional services, real estate, construction and healthcare. For example, 40% of construction CEOs rated their outlook at the highest level in Q2, compared to just 9% in Q1. At the same time, optimism dipped slightly at the top range among CEOs in retail and consumer products, manufacturing and distribution, technology, and government/nonprofit/education, the survey found.

“The sharp increase in optimism among middle-market CEOs is obviously very welcome and, hopefully, is a positive indicator, at least in the short-term,” said Jeffrey M. Weiner, Marcum’s chairman and chief executive officer. “But it is a mixed bag for different industries, with those in the tangible goods, tech and public sectors not yet recovered to the same degree as those in the service industries. The global situation in Europe and the return of inflation here further complicates things, but entrepreneurial companies generally rise to the top. Based on what we’re seeing among our clients, I’m optimistic that forward-looking companies will continue to gain strength in the post-COVID economy.”

The Marcum-Hofstra survey was the first since the Russian invasion of Ukraine, and CEOs reported that the conflict is having significant impact on their businesses and decision-making.

More than three-quarters of CEOs (77%) indicated rising energy costs are impacting their businesses, with a little more than a third (36%) reporting they are passing along some or all the higher costs. Another 38% say they are absorbing the higher energy costs.

Global events have also heightened CEOs’ concerns about cybersecurity, with 90% saying they are more concerned about such threats and almost 70% reporting they have been increasing their investment to defend against possible attacks.

“Managing the intense pace and volatility of world events - whether it is the Russian invasion of Ukraine, the global growth concerns as China’s COVID-19 lockdown intensifies or Elon Musk’s acquisition of Twitter - is the ‘new normal’ for mid-market CEOs,” said K. G. Viswanathan, interim dean of the Zarb School.

The “Great Resignation” continues to be a challenge for mid-market CEOs, with more than three-quarters (77%) reporting they have lost more employees in the past year than is typical.

Nearly 20% say they’ve lost “significantly more” employees during the last 12 months. Survey participants described what they are doing or offering to retain employees, with bonuses and work flexibility being the most popular responses. Some highlights include:

• “Allowing hybrid work.”

• “ Better sign-on bonuses and opportunities to work more from home.”

• “ Evolve culture fundamentally. Give more responsibility and opportunities, offer incentive-based pay ... recognize each person’s uniqueness.”

• “Extra health benefits.”

• “ Free health benefits for family of every permanent employee.”

• “Higher wages.”

• “ Increased our match in the 401(k) contribution.”

• “More vacation.”

• “More profit-sharing.”

• “We are offering day-care stipends.”

• “ Cookies. Cupcakes. Extra pay. PTO (paid time off).”

About the Survey
The Marcum-Hofstra CEO Survey is a periodic gauge of mid-market CEOs’ outlook and their priorities for the next 12 months. The survey polls the leaders of companies with revenues ranging from $5 million to $1 billion-plus. It is conducted as part of the Zarb School of Business MBA curriculum and developed and analyzed by Hofstra MBA students led by Dr. Andrew Forman, associate professor of international business and marketing, in partnership with Marcum.

“CEOs’ optimism in the face of the disparate focal concerns of cybersecurity, rising energy costs, and employee retention speaks to the importance of adaptability and resilience. The Marcum-Hofstra survey provides students with valuable insight into the critical importance of these leadership traits,” Dr. Forman said.

Business leaders from 257 companies participated in the survey.

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