Mark Zuckerberg, CEO of Facebook (Mobile World Live, GMSA, 2018)
Author: Emma Charlton, Writer
What’s keeping top company executives awake at night?
Muted revenue growth and whether or not to hire staff before that improves, according to a survey from KPMG.
More than half of the global chief executive officers surveyed shied away from predicting strong revenues, forecasting increases of less than 2% over the next three years. And that translated into a reluctance to hire, with more than half saying they will need to hit growth targets before taking on people with new skills.
Headcount conundrum
Only 37% predicted headcount growth of more than 6% over the next three years, a 10 percentage-point decrease compared with 2017, according to the KPMG survey of more than 1,300 CEOs.
Image: KPMG
While the survey showed that in the UK, company heads were more cautious about revenue, with 61% seeing growth below 2%, they were more forward-looking when it came to hiring.
Sixty-one percent said they were recruiting irrespective of growth targets, compared with the same view among 48% of their global peers.
Image: KPMG
The prudence unveiled by the survey might also reflect the difficulties CEOs are having as they grapple with digital business models. The executives cited cyber security and disruptive technologies as the biggest risks to growth after territorialism.
Image: KPMG
“Optimism is tempered by realism,” said Bill Michael, KPMG’s UK chairman. “Cyber risk and the challenge of connecting with customers in a digital world remain big concerns, while geopolitical uncertainty is hitting boardrooms hardest.”
Rapidly evolving technology is complicating hiring, with the chief executives citing the need to balance reskilling their existing workforces against a constantly evolving digital backdrop.
Digital disruption
“Our customers are having to reinvent their existing business models using digital technology,” said Duncan Tait from Japanese IT company Fujitsu. “So they may be automating and applying artificial intelligence to their traditional solutions.”
Only 28% of those surveyed said growth was likely to be organic, through tactics like research and development and recruitment, while the other 72% were looking at alternative strategies. M&A was the most important growth strategy for 16%, and more than a quarter said they had a high appetite for acquisitions over the next three years.
Image: KPMG
Miles Roberts, Group Chief Executive of UK-based international packaging business DS Smith Plc said growth needs to come in the right way.
“We have to be a better company, not just a bigger company,” he said. “And it’s better through the eyes of the receiver, how they feel we are a more responsible company and earning the right to be a larger company. That’s what we’re working on. Those hurdles are only going to increase for all of us.”
Emerging markets were the priority for 70% of the chief executives, with Central and South America being targeted by a third of those.
Cyber security concerns
Chief executives in several sectors said they felt underprepared for a cyber attack, with automotive, technology and manufacturing firms feeling the most exposed. While the seeming inevitability of a cyber attack was felt globally, the threat is perceived to be highest by chief executives in the US, with 68% saying it’s just a matter of time.
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