CEO Insights for What's Ahead | 11.1.23

US Consumers Remain Pessimistic About the Future—Even as They Continue to Spend Big

The Conference Board Consumer Confidence Index? declined moderately in October to 102.6 (1985=100), down from an upwardly revised 104.3 in September.

Downturn around the corner? Nearly 70% of consumers continue to fear an impending recession in the next 12 months, consistent with the short and shallow economic contraction we anticipate for the first half of 2024.

That said, when asked to assess their current family financial conditions, the share responding “good” rose in October, and those citing “bad” was little changed. This suggests consumers’ finances remain buoyant in the face of elevated inflation.

What we’re saying: “October 2023 marks three consecutive months of declining consumer confidence,” said Dana Peterson, Chief Economist at The Conference Board. “The continued skepticism about the future is notable given US consumers—at least through the third quarter of this year—continued to spend heavily on both goods and services."

"Write-in responses showed that consumers remain preoccupied with rising prices in general, and for grocery and gasoline prices in particular. Consumers also expressed concerns about the political situation, higher interest rates, and the risk of war/conflicts amid the recent turmoil in the Middle East.”

Read the results ?

How Companies Can Better Support Rural America Through Corporate Citizenship

Rural America is home to 20% of the US population but receives?5%?of large philanthropic grants. Companies can do much more to support rural America in ways that serve both companies and society.

Why invest: While companies often focus their philanthropy on where they are headquartered, there are compelling reasons to include rural America as well. It supports communities that are home to key suppliers, business partners, and customers. It can extend—and accelerate—companies’ commitments to diversity, economic development, education, and the environment. And it can help alleviate economic alienation and political polarization, which are tearing at the social fabric of our country.

The path forward: Companies looking to increase their corporate citizenship efforts in rural America can take the following steps:

• To increase awareness of local needs, recruit executives and managers from rural areas. And as they do with urban communities, begin by listening to local leaders.
• Align company programs with existing government initiatives. Currently, only 30% of companies take governmental efforts into account in their rural corporate citizenship programs.
• Focus on those fundamental areas that will improve quality of life and drive rural economic growth—such as education, entrepreneurship, and health care.

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A Health Care Rx for Lower Costs, Better Value, Greater Access

The rising cost of health care—combined with an aging population that consumes more of it—is leading to soaring health care spending. It now comprises nearly one-fifth of US GDP.

While addressing health care’s cost is essential, so is ensuring the nation receives value for its spending and that the system provides quality care that’s accessible and affordable. A plan for meeting these criteria is laid out in a Solutions Brief from the Committee for Economic Development , the public policy center of The Conference Board (CED).

Why it matters: The US offers the best care in the world and conducts unparalleled research, but millions of Americans still lack access to health care or cannot afford it.

The path forward: Comprehensive reform will involve leadership from the private and public sectors addressing Medicare, Medicaid, regulation, supply chains, and workforce policies and practices. As they develop a best-in-class system, they’ll need to:

• Pursue reforms that promote cost-responsible consumer choice among competing private plans.
• Shift away from fee-for-service toward some form of value-based pricing, both in public sector programs and care delivered through private insurers.
• Focus more on preventative care and wellness, rather than treating problems once they occur. Doing so will improve the quality of care and overall health outcomes, as well as lower costs.

Read the Solutions Brief ?

Take the CHRO Confidence Survey to Shape the Future of Human Capital

Calling all chief human resources officers: We need your voice to understand current business conditions, the state of the labor market, and our profession’s future.

The Conference Board? Q4 CHRO Confidence Survey is an opportunity to share what’s happening in employee recruitment, retention, and engagement at your organization—and the top priorities for 2024. Your confidential input will help shape the plans of peer executives across the economy.

Will cooler trends prevail? In our Q3 survey, we found CHRO confidence slipping on a range of measures. Just 38% of CHROs said they planned to increase hiring—down from 51% in Q2. This slowdown in hiring intentions was mirrored by a concerning decline in employee engagement: CHROs said workers felt less empowered, connected, and fairly compensated than they had in past quarters.

Since then, the US job market has proven much hotter and more resilient than many had feared—or hoped. How has this impacted on-the-ground conditions for human capital leaders?

Share your perspective. As a participant, you’ll be among the first to access the survey results.

Take the Q4 survey ?

AI Can Deliver Creativity in a Flash for Marketers and Communicators, but Human Creativity Remains Crucial

Can generative AI meet the creative standards top companies rely on?

Nearly two-thirds (64%) of marketing and communications executives think machine-generated creative output will positively advance their business goals. However, many worry AI may dilute the distinctiveness of their brand—and impact their ability to attract future talent.

Talent management in the age of AI: While the technology is evolving at a breakneck pace, there are already clear implications for marketing and communications:

• Human creativity: Human ingenuity and judgment might become even more important assets—to review, refine, differentiate, and elevate the quality of AI output.
• Experience in marketing and communications and judgement are increasingly crucial to complement a team’s evolving AI expertise, including to ensure that AI-based or AI-inspired output doesn’t harm a brand’s reputation.
• Advertising the profession: Since AI is changing creative jobs, there's a need to better market careers in creative fields including marketing and communications, especially junior roles, and for more concerted recruitment.
• Talent development: Managers need to think about how to train their teams on AI in formal and informal ways. They also need to consider new ways to develop junior talent since AI may do some of the work that less experienced talent used to do, which also helped them learn the field.

Read the report ?

QUOTABLE: There's More to Health

“Health is more than what happens in hospitals and clinics…Health is how we work together. Health is about building a sense of community. Health is about bringing back a sense of respectability in our public discourse. It’s about promoting the values of honesty, decency, truth, integrity.”

— Michael Dowling , President and CEO of Northwell Health , and a recipient of?our 2023 Distinguished Leadership Awards.

Watch his remarks?from last week's celebration.

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