Could a full-time return to the office be on the cards?

Since COVID-19, many previously office-based workers have either been fully home-based or split their time between the office and remote work. 

Could this be set to change? 

The results of our Q1 2025 Vistage CEO Confidence Index reveal that 34% of SME business leaders advocate the return of their workers to the office five days a week to reinforce team dynamics. 21% believe that this move would increase collaboration and productivity, while 34% state that it would boost team cohesion and company culture. 

With CEO confidence and predictions for the UK’s economic conditions both declining, the full report (downloadable here) suggests that talent acquisition and management are the focus for many SMEs this quarter. 

Challenging times ahead

Since Q2 2024, our CEO Confidence Index has revealed a consistent decline in overall economic confidence amongst CEO leaders. This decline continued in Q1, dropping from 91.4 to 87.5 in the last quarter. 

53% believe that the UK’s overall economic conditions have worsened in the last year – a 9% increase since Q4 2024. Similarly, while 35% of our Q4 2024 respondents believed that the UK’s economic conditions would worsen over the coming 12 months, this percentage has jumped to 41% in 2025. 

With the Chancellor’s Spring Budget featuring announcements likely to impact consumer spending – and little support for SMEs – these sentiments are, perhaps, unsurprising. Despite this, however, SME leaders are demonstrating resilience and tenacity in terms of their own business prospects. 

Glimmers of hope

Despite declines in current and future confidence, over half of our respondents still expect their firms’ revenue to increase over the coming 12 months. This figure stands at 56% – similar to the 57% seen in Q4 2024 – and while this percentage has been falling since Q1 2024, our survey reveals other signs of optimism. 

38% expect their businesses’ profitability to grow over the next year – up from 34% in Q4 – with just 23% (down from 31%) expecting it to fall. A further 38%, however, believe profitability will remain the same, suggesting that there is still an element of caution and uncertainty for the year ahead. 

Despite this uncertainty, SME leaders are unlikely to reduce head counts. Just 18% say their total employee numbers will decrease in the next year (no change from Q4’s figure). However, while 46% stated in Q4 that their head count would rise, this figure has dropped to just 31% in Q1 2025.

Investing in innovation

The Spring Statement may have featured further budget cuts, resulting in further challenges for small businesses. Despite these challenges, though, many SMEs are continuing to invest in their future success. 

The majority of SMEs are now embracing AI to improve business efficiency, with 70% of CEOs now actively engaging with AI-based tools. 

With the use of new technologies comes the need for additional training and policies. 50% of SME business leaders state that they have invested in training sessions to enable their team to integrate AI into their business operations, while 46% have created AI policies to provide clear and responsible guidelines for its use in the workplace. 

What lies ahead for the UK’s SMEs?

There’s no denying that the current UK landscape is challenging for many SMEs – and challenging in a variety of ways. The Spring Statement, the uncertainty over Trump’s tariffs, potential decreases in consumer spending and more are all contributing to fears about what the future could bring. 

However, despite these fears, SMEs continue to be positive about their own business prospects, and to invest in both talent and technology. As Rebecca Drew, Managing Director, Vistage International, says, “The ability to adapt, invest in the right areas, and make bold decisions will be what ultimately separates the thriving businesses from those that struggle in the coming months”. 

Will you be one of those businesses that thrives? 
Download our Q1 2025 Vistage CEO Confidence Index here.

0 views