PWC just-released its 25th Annual Global CEO Survey which includes some fascinating insights into what global business leaders are thinking about and how they are planning for the future. Despite the continued gloomy headlines, the nearly 4.500 CEOs from 89 countries are generally optimistic about the future and global economy. Here are a few takeaways.
Bullish on economic growth
CEOs overall are optimistic about economic growth, though that optimism varies by country. Leaders from countries whose economies began to recover from the pandemic shock earlier—Brazil, China, Germany and the US—are less optimistic; they are concerned about inflation, real estate bubbles, supply chain disruptions, and labor shortages. In India, Japan and the UK, leaders are more optimistic.
A variety of concerns about the future
The leaders are more worried about the impact of cyber risks than global health concerns when it comes to top-line revenue. Macroeconomic volatility, including fluctuations in GDP, unemployment and inflation, ranks close behind. The CEOs were much less concerned about the effects of climate change, geopolitical conflict and social inequality—at least in the short term. (Climate change jumped to the top threat position for companies with revenue over US$10b.) In terms of talent management, the leaders did acknowledge that health risks and social inequality could inhibit their ability to attract and retain critical skills and talent.
CEO concerns reflect the objectives outlined in their compensation packages
The CEOs’ most pressing concerns reflect the objectives outlined in their compensation packages, including customer satisfaction, employee engagement and automation or digitalization—all directly correlated with business performance. However, social goals that are often highlighted in company statements, including greenhouse gas (GHG) emission reduction, improved workforce gender representation, and increased racial and ethnic diversity, are infrequently tied to CEO compensation and, consequently, a lower priority.
Company environmental goals sometimes get lip service
Environmental goals are increasingly part of corporate strategies and of concern to boards, shareholders, customers and employees. But only about one in five of the surveyed companies has committed to achieving net-zero (reducing greenhouse gas emissions to almost zero and removing the remaining emissions). Many firms back the objective in theory but often claim they do not produce a meaningful amount of emissions or lack the capabilities to mitigate them. Larger companies are more likely to have made this commitment.
Fortune/Deloitte CEO Survey
In a just conducted Fortune/Deloitte CEO Survey, fielded January 4-12, 2022, 175 leading CEOs were similarly optimistic yet uncertain about what 2022 would bring. The survey was conducted as the Omicron variant continued to rage and inflation surged. Yet these were not the CEOs’ only concerns.
According to the survey, “While the pandemic is still in the top three across all industries, the proportion of CEOs who name it one of their top three has fallen significantly from more than 70% in Fall 2021 to 56%. Relatively unchanged is the even greater percentage of CEOs, 71%, who select labor/skills shortage. In third place, supply chain disruption was noted as a top-three external issue for 46%.”
Talent shortages are a continuing and growing concern. More than three-quarters of these CEOs say they’ve experienced labor shortages. Supply chain disruption is also a headache; 33% of the CEOs said they needed to redesign their supply chains due to the pandemic.
Talent Trumps All
We can hope that some of these immediate concerns—notably the pandemic and inflation—will ultimately be brought under control. However, the talent shortage will prove to be a more enduring issue in many countries, given the Great Resignation, the accelerated pace of retirements and the demographic crunch that is shrinking the working-age population, even in China. And the leaders clearly recognize the central role that talent plays in their companies’ short-term performance and long-term success.
Much of the discussion around talent these days centers on remote work and what the return to the office will look like. Yet talent mobility remains an underutilized tool, even for some companies that already have a program in place. Talent mobility can be a vital part of a company’s talent acquisition and retention strategy. While remote work has exploded and will likely continue to be a permanent part of the post-covid working world, there will always be a need to align talent across company locations and create development opportunities for the company’s future leaders. TRC stands ready to help you build a new relocation program or to optimize your existing relocation program.