2023 was a dynamic year for businesses across all sectors. Artificial intelligence (AI) went from a novel technology to a more widely utilized business productivity tool. Many companies invested additional resources in sustainable business practices. And digital business solutions helped companies thrive. Here are predictions for what current and emerging trends will further shape businesses in 2024.
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Digital tools will continue to unlock operational efficiencies
Businesses of all sizes and sectors are embracing digital innovation to automate tasks and streamline processes. The new year provides business owners with an opportunity to review their operations — and industry best practices — to identify how digital tools can help them expertly manage various aspects of their businesses.
The Bank of America Mid-Sized Business Owner Report found that 54 percent of owners plan to apply for a bank loan or line of credit within the next year, and among that group, 43 percent plan to use the money to invest in new technologies. For example, 87 percent of business owners said they plan to utilize more automation and AI tools during the year ahead, and when asked how they plan to use these tools, owners listed reasons such as assisting with hiring (45 percent) and streamlining payroll and bookkeeping (42 percent).
Businesses also expect to use more digital payments in 2024, with 76 percent of owners anticipating all their transactions becoming digital at some point. A confluence of trends and benefits has helped digital payments proliferate — including widespread smartphone adoption and the growth of cloud-based software solutions, as well as increased digital transaction speeds and additional security through encryption and tokenization. Digital automation will also continue to influence how businesses manage their accounts payable, as digital solutions make it easier and more efficient to process payments, track invoices and manage cash flow.
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Labor markets are beginning to shift
The wave of resignations seen over the past few years has slowed, and according to the Bank of America 2023 Workplace Benefits Report, nearly 70 percent of employees plan to stay with their current companies in 2024.
As more businesses invest in digital tools and AI, they must prepare workers to use these tools properly through upskilling. Bridging the gap between a tool’s potential and company readiness will require training, and providing that training can help boost employee attraction and retention. Taking note of new regulations is important too. Recently, the Colorado Division of Insurance’s AI insurance regulations went into effect and Colorado is now the first state in the nation to adopt regulations aimed at insurance algorithms.
Despite this, labor shortages continue to challenge business owners. This year, we expect mobility between industries to continue as businesses hire more for skills than traditional industry experience or even education. A McKinsey & Co. report notes that hiring for skill is five times more predictive of on-the-job performance than hiring for education, and this practice also widens the potential talent pool.
Savvy business leaders will continue in their efforts to meet existing and prospective employee expectations in 2024. Bank of America’s Workplace Benefits Report found that over half of employers currently have in-person work models, but workers continue to value flexibility. Remote work isn’t a good fit for all businesses, but those supporting it in full or part may benefit from greater worker satisfaction and retention.
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Strategic partners can help navigate uncertainty
2024 is a general election year, and with the U.S. presidential election and other global elections, we can expect to see market volatility. Further economic uncertainty will be fueled by mixed views about the likelihood of a recession and when interest rates will decrease.
Fortunately, the stock market tends to restabilize after elections, regardless of which party is in power. Business owners should be prepared to steer their companies and employees through these uncertain times, and one of the best ways to do that is by leveraging the expertise and tools of their strategic partners, including bankers, financial advisors, lawyers and accountants.
It’s one thing to monitor trends, but business leaders must adapt now to remain at the forefront later. By embracing these changes and investing in new strategies and technologies to support your business objectives, companies can position themselves for success in 2024 and beyond.
Raju Patel, Global Commercial Banking Market Executive and Bank of America Colorado President.
