Despite a significant decline in confidence about the global economy over the past decade, top business leaders are remarkably optimistic about the future prospects and growth of their respective corporations.
While only 72% of CEOs are confident in the world economy’s direction, down from 93% in 2015, an overwhelming 92% plan to increase their workforce in the next three years, according to the latest KPMG CEO Outlook survey.
This buoyant hiring outlook—the highest since 2020—comes even as CEOs face mounting pressures and shifting threats to growth, with supply chain and operational issues now outranking geopolitical and cybersecurity concerns.
In the last 10 years, chief executives have actively worked to foster confidence in their organizations through strategic initiatives. They have significantly increased investments in innovation and technology, most notably artificial intelligence, recognizing these areas as key drivers of market dominance. Additionally, CEOs have prioritized human capital, placing employees at the center of their growth strategies.
In a conversation with global CEO and chairman of KPMG International, Bill Thomas shares insights on how business leaders continue to build resilient companies capable of navigating an increasingly complex and uncertain corporate landscape.
Artificial Intelligence Is The Top Investment
CEOs are increasingly recognizing the pivotal role of human capital in harnessing the full potential of generative AI. Despite financial challenges, most business leaders are doubling down on AI investments, with 64% ranking it as their primary focus for 2024.
“The last 10 years has been framed by a backdrop of volatility and change, from a global pandemic to surging inflation and the rise of AI,” Thomas stated. “In the face of such pressures, CEOs are steadfast about the need to invest in the future.”
He said leaders must demonstrate “resilience, agility and innovation” in a rapidly changing environment. Over the next decade, CEOs who implement “bold strategies” and invest in the appropriate technologies and talent will be positioned to achieve sustainable, long-term growth.
According to projections by Goldman Sachs, major technology companies are expected to invest over $1 trillion in AI initiatives over the next five years.
Anticipated benefits of this fast-emerging technology include boosting efficiency and productivity, preparing the workforce for future challenges through upskilling and fostering increased organizational innovation.
While the majority view AI as a leading force of expansion and innovation, they are taking a measured approach, with nearly two-thirds anticipating returns on their AI investments within a three to five-year timeframe.
The Workforce: Reskilling, Upskilling And Return To Office
Employers are also turning their attention to workforce-related issues that could impede the future growth of their organizations.
While 76% of CEOs anticipate that AI won’t significantly alter their overall headcount, there is a notable skills gap when it comes to the adoption of GenAI. Only 38% of leaders believe their current staff are adequately equipped to maximize AI’s potential. This has prompted over half of employers to reevaluate the skill sets needed for entry-level positions, the report stated.
Nearly one-third of CEOs express concern about changes in the labor market, particularly the imminent retirement of many employees and the scarcity of qualified workers to fill their roles. Recognizing this potential talent gap, 80% of CEOs support the idea that companies should invest in upskilling and reskilling programs.
As a proponent of “staying curious,” Thomas emphasizes that it is incumbent upon both organizations and individuals to commit to lifelong learning, a value that is embedded into KPMG’s own culture: “Excellence means relentlessly delivering quality work to the highest professional standards. We do this by staying curious and taking personal responsibility for our learning.”
Additionally, there is a corporate push toward traditional in-office work, despite employees seeking work-life balance and flexibility from their employers. In fact, an overwhelming majority of CEOs are anticipating a complete return to office within the next three years, with 83% expecting this transition—a marked increase from 64% in the previous year.
This trend is further reinforced by the 87% of respondents who indicate a willingness to reward employees who make the effort to come into the office, offering incentives, such as preferential assignments, salary increases or career advancements.
The shift from hybrid work to full time in the office is already underway. On Monday, Amazon CEO Andy Jassy announced in a company blog post that the tech giant is mandating its employees to return to the office five days a week, starting January 2, 2025.
“When we look back over the last five years, we continue to believe that the advantages of being together in the office are significant,” Jassy wrote in the memo. “We’ve observed that it’s easier for our teammates to learn, model, practice, and strengthen our culture; collaborating, brainstorming, and inventing are simpler and more effective; teaching and learning from one another are more seamless; and, teams tend to be better connected to one another. If anything, the last 15 months we’ve been back in the office at least three days a week has strengthened our conviction about the benefits,” he added.
Source: Forbes
