Middle-market C-suite executives are navigating uncertainty while poised to make key longer-term investments in technology, talent and growth, according to the Citizens Business Leaders Survey released March 12 by financial institution Citizens Financial Group.

The survey found that more than half of middle-market business leaders, 56%, expect their companies to hire more personnel this year, while 57% plan to invest more in growth than they did in 2024. Only 10% of leaders expected their organization to reduce personnel in 2025.

In addition, 84% reported recruitment and retention are a top or high priority, and 87% expect workforce challenges to directly impact their growth over the next three to five years. Competition from other companies was the top challenge respondents face, cited by 32%, followed closely by a lack of qualified/skilled candidates and rising labor costs, both cited by 31%.

Once talent is in the door, skills gaps, compensation pressures and limited training resources are making retention difficult.

Middle-market companies are investing in both people and technology, with nearly two in five putting more resources into employee training and development to improve retention and recruitment, while 38% are turning to automation or AI to ease the pressure when hiring falls short. And 36% are doubling down on workplace culture and employee engagement, while 33% said that they were offering higher wages and better benefits.

Business Outlook

“Business leaders came into the year with a generally upbeat feeling about the economy, and that sentiment remains, despite macroeconomic volatility,” Don McCree, Citizens senior vice chair and head of commercial banking, said in a press release. 

The survey results underscore a sense of “cautious optimism” about the business outlook for 2025, as 83% of leaders believe their business is in a better financial position now than it was a year ago — an outlook that contrasts with many broader economic indicators.

More than half of business leaders cited inflation as the greatest risk to companies’ financial performance in 2025. Key factors representing the greatest risk include:

• Inflation, 59%
• Interest rates, 44%
• Tariffs, 42%
• Financial market volatility, 39%
• A possible recession, 34%
• Increased taxes, 33%

Business leaders at 502 middle-market US businesses who are directly involved in corporate decision-making completed a web-based survey in February for the Citizens Business Leaders Survey, while C-level executives at 250 middle market US businesses completed a web-based survey between January and February for Citizens Middle Market Business Challenges Survey.