More than four in five UK mid-market chief executives have ruled out relocating themselves or their headquarters overseas, but half have slowed or reduced hiring amid tax, regulatory, and cost pressure.
The latest Vistage CEO Confidence Index found that 82% considered relocation outside Britain very unlikely. At the same time, 51% had slowed, paused, or cut recruitment in response to the operating environment, while 26% had delayed or cancelled capital investment.
The findings describe companies that remain committed to the UK while restricting expansion. The supplied research did not state the UK sample size, limiting the extent to which its percentages can be treated as representative of the entire mid-market.
Economic confidence was markedly weaker than executives’ expectations for their own companies. Six in ten said conditions had deteriorated over the previous year and only 7% reported improvement, yet 61% expected sales revenue to increase during the next 12 months and 43% forecast higher profits.
Chief executives are consequently relying on market share gains, productivity, product development, acquisitions, or internal execution rather than expecting a stronger economy to lift most companies simultaneously.
Costs remain the main constraint. Some 84% reported substantial or moderate increases in inputs, while 67% said customers had become significantly more price-sensitive.
Where price increases cannot be passed on, companies must absorb higher costs through lower margins, efficiency measures, reduced investment, or changes to their products and services.
Professor Joe Nellis, economic adviser to Vistage, said: “The new government has inherited an intrinsically challenging landscape. SME leaders have lost confidence in the UK economy, yet they retain confidence in their own operations. They are not looking for handouts and they are not planning to leave for greener pastures. Instead, they’re backing themselves to drive business growth while staying loyal to the UK.
“That may sound positive, but self-reliance only stretches so far when margins are restricted. Caught between persistent input inflation and buyers who will not absorb it, business leaders are being forced into hedging mode. The real risk is the quiet freeze on domestic ambition. Employers tell us that tax friction, and employer’s National Insurance in particular, is the single biggest drag on recruitment and workforce expansion. Without hiring, growth is all but impossible.”
A hiring slowdown can develop without the visibility of large-scale redundancies. Companies may leave vacancies unfilled, reduce graduate intake, rely more heavily on contractors, delay a new site, or ask existing teams to absorb additional work.
Each decision appears limited in isolation, but their combined effect can weaken productivity and reduce entry routes for younger workers. Extended recruitment pauses also create skills gaps that become difficult to fill when demand returns.
Confidence has already weakened across several UK regions, and the Vistage findings indicate that caution is affecting operating decisions even where executives remain confident in their own ability to grow sales.
Employment costs extend beyond salary. Employer National Insurance, pensions, benefits, recruitment fees, training, equipment, property, management time, and legal compliance all contribute to the cost of adding permanent staff.
When demand remains uncertain, automation, outsourced services, and temporary capacity can appear less risky. Those choices may improve short-term flexibility but leave companies dependent on external providers or unable to build internal capability.
Leadership strain is also evident. Almost one-third of chief executives, at 31%, said they frequently felt burned out or emotionally exhausted, while a further 33% experienced those conditions occasionally.
Some 93% of surveyed organisations were investing in management and leadership development, suggesting that companies recognise the effect of sustained pressure on decision quality, succession, retention, and organisational change.
Emma van Rooyen, managing director of Vistage UK & Ireland, said: “What our members describe is not pessimism. It is caution held for too long. The businesses that come through this will be the ones that keep making decisions while the picture is still unclear, and very few leaders can do that on their own. Close to two thirds of the CEOs in this data are running on empty, and 93% of their firms are investing in leadership development because they can see what that costs. Leadership at this level was never meant to be a solo job.”
Retaining headquarters is only one measure of economic commitment. Hiring, investment, research, new premises, and management capacity determine whether a company expands its domestic activity.
Executives are likely to remain cautious until they can forecast employment costs, taxation, regulation, and demand with greater confidence. In the meantime, many will continue pursuing revenue growth through existing teams while keeping larger investment decisions under review.
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