It would be an understatement to say that the last three years have been challenging for businesses in the UK.
Brexit, the Covid pandemic and the war in the Ukraine are just three occurrences which have had, and will continue to have, significant long-term implications for those running companies across the country.
These ‘one-off’ events are compounded by other longer-term trends which chief executive officers (CEOs) must build into their company strategies going forward, including climate change, the continuous search for talent and the impact of new technology on the way they do business.
Understanding how business leaders are reacting to the changing global economic situation is the focus of the latest 2022 CEO Outlook from global accountants KPMG which examines the perspectives of 1,325 global CEOs to provide a detailed insight into how they view the business and economic landscape changing over the next three years.
In terms of the economy, the survey suggests that 85% of global CEOs reported positive growth expectations in 2022, despite the current economic and geopolitical challenges they are facing. A similar proportion also expected that there would be a recession over the next 12 months although nearly six out of ten believed this would be mild and short, with most already having plans in place, including boosting productivity, managing costs, and reconsidering digital transformation strategies, to deal with this eventuality.
Given recent events, rising interest and inflation are concerns going forward as is the pandemic fatigue that many companies and their staff have suffered which, in turn, has led to the growing phenomenon of “the Great Resignation” which this column has discussed on previous occasions.
In terms of technology, digital transformation remains the main concern for CEOs which is not unexpected given the changes that were accelerated during the Covid pandemic. As a result, nearly three quarters of global CEOs continue to prioritise digital investment to give them competitive advantage and to achieve growth in their marketplace. In fact, whilst 70% of those surveyed said that they need to speed up investment into digital opportunities and, more importantly, focus on those areas that can have the largest impact on the strategic goals of the business.
The attraction and retention of talent has been mentioned as a top priority in many business surveys over the last three years and this one is no exception with over 70% of CEOs are of the opinion that the ability to retain talent are as important to the business as dealing with the pressures of inflation and the rising cost of living.
Whilst there may be a natural reduction in headcount if there is a recession over the next six months, CEOs not only expect their workforce numbers to increase in the next three years, but will also continue to invest in their staff to boost productivity.
Interestingly, two thirds of CEOS expect that their employees will have returned to the office to work which may conflict with the increasing expectations of talented individuals to continue to enjoy the hybrid approach that has been prevalent recently.
Finally, given the growing importance of environmental, social and governance (ESG) initiatives in dealing with global issues such as the drive towards net zero, the CEOs surveyed agreed that such programmes had a positive effect on the bottom line and helped to boost their business’ financial performance.
More importantly, in embracing ESG principles, the best talent can be secured for the future and will strengthen what employees consider to be important within their business. This has led to demand for greater transparency not only from stakeholders but also from employees and potential new hires and that not meeting their expectations can result in recruitment challenges.
There is an increasing focus being put on the social side of ESG although there is a feeling that progress on inclusion, diversity and equity is improving too slowly and more needs to be done to ensure that this becomes a key consideration for businesses.
Therefore, this report is an indication how those at the head of some of the world’s leading companies are looking to the future and are changing their organisations to meet with economic and social challenges through increased digital transformation and a focus on the attraction and retention of talent.
However, what is increasingly important is the role of business in meeting environmental and social goals which, in themselves, can improve productivity and competitiveness.
That is why the Cardiff-based communications group Cowshed is supporting a new “good business” category at this year’s Fast Growth 50 to celebrate the efforts of Welsh firms in this area.
Certainly, businesses can have a wider impact despite the worsening economic conditions and ensuring they can be productive whilst meeting environmental and social goals should be the focus of policymakers looking to boost economic growth whilst making a difference to society.
Read more:
- RWE and Marine Power Systems partner for Celtic Sea offshore wind opportunities
- The Swansea cleaning entrepreneur who now runs a multi-million pound business
- The click-and-collect economy worth more than £1bn in Wales
- UK boss of Savills Richard Rees on the return to the office and creating a new WDA like body
- The entrepreneur looking to create a chain of Italian restaurants across Wales
