Deloitte Private released findings from its latest survey, "Private Company Outlook: Productivity," that reveals the priorities and tactics private companies are leveraging to increase productivity over the next year. The survey asked 100 private company C-suite executives and leaders about their strategies, challenges, and concerns around driving productivity.

Key Findings:

• An inability to increase productivity could threaten company valuation or business growth. Among smaller organizations (annual revenues below $500 million), 55% said declining valuations could be a consequence of failing to meet their productivity goals. Meanwhile, 56% of larger companies (annual revenues $500 million and above) said slower business growth could be a result. 

• Investing in new and existing talent in the form of hiring and upskilling ranks as the top priority to increase productivity. C-level leaders from larger companies said hiring qualified/skilled talent (51%) was the top priority, while smaller organizations ranked upskilling/reskilling (45%) at the top of the list.

• While few private company respondents (8%) report currently experiencing productivity increases from AI, 87% expect to see gains within the next three years. Larger companies are nearly three times as likely to prioritize investments in advanced technology like AI (44%) than smaller companies (16%).

• Private companies identify major areas of focus to increase productivity – from marketing and sales to emerging technologies. Respondents from smaller organizations said productivity improvements are most needed in procurement, product development, and sales/marketing to achieve business priorities. Larger organizations cite emerging technology/AI, hiring talent, and HR as the areas in most need of increased productivity. 

• Private companies will mostly rely on capital investment to fund productivity improvements. Eighty-seven percent of leaders surveyed say their organization will finance investments in productivity with equity from new investors, existing investors, or both. When it comes to gains from increasing productivity, companies are most likely to use them to build cash reserves (35%) or to make an acquisition (35%).

"Among private companies, increasing productivity has risen to the top of the list of priorities, driving leaders to explore a broad range of resources and solutions to resolve inefficiencies and drive progress," said Wolfe Tone, vice chair, and U.S. Deloitte Private leader. "Efforts to improve productivity range from investments in human talent, including hiring and reskilling, to leveraging emerging technology like AI. Private company leaders see the success of these efforts as paramount to ensuring business stability and growth in the next year and beyond."