Half of UK businesses expect 2024 to be easier than 2023

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UK businesses are hopeful for 2024 according to new research from Pleo. The CFO’s Playbook for 2024, which polled over +500 UK financial decision makers, found that almost 50 percent of UK businesses believe 2024 will be “easier” than 2023 (vs. 35 percent believing it will be harder and 15 percent anticipating that it will be the same as last year). As such, with a waning concern around inflation – a 20 percent decrease since 2023 –  businesses are targeting more ambitious goals. Nearly three quarters are prioritising cash growth, and while this was also the primary objective of businesses last year, findings show a 163 percent increase in British businesses focussed on this ambition.

Other targets last year included ‘improve efficiencies’ (24 percent), which has become an increased priority in 2024 – with over half of businesses (55 percent) reporting it as a key ambition – and ‘stabilise the company’ (22 percent), which has been replaced by ‘grow talent’ (38 percent) in 2024.

With so many businesses focusing on cash growth this year, 1 in 4 UK businesses are looking to reduce spending. According to the report, while businesses are keen to address a decrease in spend, only a third feel they have an excellent grip on managing it. A compounding impact is that just 28 percent feel they have a firm grasp on their financial health and performance, falling to just 13 percent for those businesses with 250-499 employees.

One factor playing a significant role in this lack of visibility and confidence in spend management is the way many define expenses. Almost half (47 percent) of UK businesses believe that expenses and spend are different, but only 24 percent have clear guidelines for their finance teams on how they differ. As a result, finance teams are currently leaving what is and isn’t recorded in terms of business spending to chance. In fact, findings show that more than half of UK businesses admit to not accurately tracking items into their spend management strategy until they exceed £10,000.

Keeping a tighter rein on spending means deeper insights and fewer spend duplications. But it also reduces the need for radical strategies to cut costs. While 21 percent of businesses are investing in renewable energy to reduce energy bills – the primary threat (24 percent) to businesses in 2024 – a significant proportion are reviewing salaries.

For instance, the research revealed that 1 in 5 UK businesses are considering reducing pay for remote workers – a decision that can potentially hit 16 percent of the UK workforce. Additionally, 41 percent of businesses are hauling employees back to the office, with the most common reason behind this being “other companies are doing the same” (30 percent), followed by using performance-based insights and staff feedback (both 29 percent).

Despite this, staff numbers will remain buoyant in 2024. Only a quarter (25 percent) believe they will have to let staff go in 2024 – improving significantly from last year, where 42 percent of businesses were making staff cuts – while the data notes a 27 percent increase in the viability of hiring.