CFOs and CHROs Identify Top Factors in Building Sustainable Growth

The survey also shows that midmarket companies are using a multipronged approach to personnel: taking actions to address urgent hiring needs while also fostering a forward-looking talent agenda to create a more engaged workforce for the long run. The survey found that these longer-term agenda items include:

• Implementing training and development programs to give employees a sense of personal growth and a vision of a career path in the organization.

• Strengthening the top team, so managers and staff have better leaders. Research shows that ineffectual bosses are a primary driver of employee resignations.

• Improving culture to enhance teamwork and create the sense of belonging that is a leading source of retention.

• Advancing diversity, equity, and inclusion not just in recruiting but throughout the "employee life cycle," which can expand talent pools, ensuring that all employees have a chance to achieve success. Having a sense of value and purpose at work is especially critical for younger employees.

Solidifying and Streamlining Processes

The pandemic forced many midlevel enterprises to be more agile and nimble than they normally would-and many emerged the better for it. Experimentation and novel approaches allowed companies to try a host of strategies and solutions, and they now have a ton of data upon which to make decisions about what worked and what didn't.

But with rising costs and continued supply chain concerns, CFOs are prioritizing those processes that will increase efficiency and lower risk, to avoid squandering the gains of the past year. Technology will play a big role in these efficiency pushes. In fact, 40% of CHROs have already outsourced or automated some HR activities-and 30% expect to do more in 2022.

Greater investments will also be made in people processes to allow for smoother remote management of and collaboration among teams. For finance, the goal this year is to acquire new programs and platforms (rather than investing in existing technology as was the case in 2021) to aid in more and better FP&A, which will, again, allow them to make more confident decisions. (Currently 32% of midmarket enterprises use advanced FP&A tools, while 45% say they plan to implement them this year.)

Technology investments won't be limited to back-office operations: Customer behaviors changed rapidly during the pandemic, with many consumers now expecting a higher level of digital integration and touchless service. B2C companies are more likely to make an investment in customer experience over B2B companies.

Prioritizing a Growth Mindset

While midmarket companies mostly performed well during 2021, the AchieveNEXT survey revealed a smaller subset of companies who recorded above-and-beyond revenue growth in the double digits. These so-called "fast growers" behaved differently than their peers, who recorded single-digit or zero percent growth.

For one, these companies prioritize growth: They are 16% more likely than their peers to say that organic growth is their top priority, and about 11% less likely to emphasize efficiency and productivity gains. They are more likely to fund the growth with equity-28% more likely than the midmarket as a whole-and correspondingly less interested in adding debt capital to their balance sheets.

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