Marcum-Hofstra University CEO Survey Reveals Increase in Outsourcing of Critical Business Functions Among Middle-Market Firms

MAY 22, 2024 (New York, NY) – Marcum LLP, in collaboration with Hofstra University, has released the findings from its latest CEO Survey, offering invaluable insights into the business environment, outlook, and trends among middle-market CEOs.

A significant takeaway from the survey indicates a rising tendency toward outsourcing critical business functions. The survey reveals that 29.1% of CEOs reported increased outsourcing activities compared to their historical approaches. Cybersecurity emerged as the most outsourced function, with 17.9% of companies primarily relying on external expertise to secure their data and information systems. Conversely, human resources remained the least outsourced function, with only 4.8% of CEOs opting for external services.

Furthermore, over half (50.2%) of the CEOs identified the primary motivation behind the outsourcing trend as access to superior expertise and talent. Cost savings (27.9%) and improved efficiencies (20.3%) were other significant motivators contributing to the decision to outsource various corporate functions.

“With talent in short supply and margins growing ever tighter, the advantages of outsourcing are becoming clearer than ever. Every day, more businesses are waking up to the reality that the specialized expertise of outside partners can relieve some of the day-to-day burden and enable organizations to concentrate their efforts where they’re most effective, which helps to drive growth and innovation,” said Jeffrey Weiner, Chairman & CEO of Marcum LLP. “Recognizing this need, Marcum began offering a comprehensive suite of outsourced services, from HR to IT, to accounting and beyond. Each of our outsourcing teams is dedicated to enabling businesses to remain focused on delivering their unique services and solutions while our experienced, qualified teams safeguard their operational capabilities.”

The Marcum LLP-Hofstra University CEO Survey also presents a nuanced view of the current business climate. Here are the key findings from this CEO survey:

Business Environment

• There has been a notable rise in the percentage of CEOs expressing the highest level of optimism (“10”) about the current business climate (13.9%, up from 8.6%).
• The majority of CEOs (88.7%) maintain a rating of 5 or higher regarding their outlook, with the weighted average remaining steady at 6.9.
• Industry-specific optimism varies, with technology remaining relatively high (56%), construction experiencing a decline (33%), and retailing witnessing the most significant drop in optimism to 18%.

Influences on Business Planning

• Economic concerns continue to dominate, with 54.2% of CEOs indicating it as a top-three influence on planning efforts, up from 49.2% in the previous survey.
• The availability of talent (38.2%) has overtaken rising material and operational costs (35.1%), the second most prominent concern for CEOs.

External Issues of Concern

• CEOs indicate that an economic slowdown (45.0%), interest rates and the cost of capital (42.7%), and political uncertainty (35.8%) are the primary external issues of concern.
• Other notable worries include supply chain challenges, rising energy costs, labor shortages, and increasing customer expectations.

The survey was developed, conducted, and analyzed by Zarb School MBA students, led by Dr. Andrew Forman, associate professor of international business and marketing, in partnership with Marcum.

“In our increasingly interconnected world, the ability to adapt and respond to the ever-evolving market conditions is essential for business sustainability,” remarked Dr. Forman. “The insights from our joint CEO Survey with Marcum LLP underscore the value of outsourcing as a critical tool for CEOs looking to harness external expertise while maintaining internal focus and agility.”

About the Survey
The Marcum-Hofstra CEO Survey is a periodic gauge of mid-market CEOs’ outlook and priorities for the next 12 months. The survey polled the leaders of companies with revenues ranging from $5 million to $1 billion-plus and was conducted the week of April 29, 2024. 251 mid-market CEOs participated.

“Understanding the changing tides of the business landscape is key to preparing tomorrow’s leaders,” said Janet Lenaghan, dean of the Hofstra University Zarb School of Business. “Through our partnership with Marcum LLP, we provide our MBA students with real-world learning opportunities that shape their perspective on strategic decision-making, such as the significant trend towards outsourcing identified in our latest CEO Survey.”

About the Frank G. Zarb School of Business at Hofstra University
Hofstra University’s Frank G. Zarb School of Business prepares students to become tomorrow’s global leaders. Located just 25 miles from New York City, Zarb students have access to internships and networking opportunities across every industry. The Zarb School combines entrepreneurial, hands-on learning and research with real-world experience and mentorship in state-of-the-art facilities, including a Behavioral Research Business Lab, Institute of Innovation and Entrepreneurship, Core Skills Lab, and academic trading room. Our undergraduate and graduate programs in accounting, management and entrepreneurship, marketing and international business, finance, and business analytics are ranked and recognized by US News & World Report, Princeton Review, and Poets & Quants. Visit hofstra.edu/zarb for more information.

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.