Growth prospects | Technology | Talent | ESG
It’s ten years since we first launched the KPMG CEO Outlook. And we’re back this year with more insights into what’s keeping CEOs up at night and what they’re prioritising.
In 2024, we’ve surveyed 1,325 global business leaders – including 150 from the UK – overseeing companies with revenues of at least US$500 million from some of the world’s biggest economies and key industries.
The responses from UK CEOs show they’re feeling positive about growth prospects. But they also feel under more pressure as they continue to face an array of interrelated challenges.
To tackle them, they’re pursuing strategies to build more resilient, agile and innovative businesses. And they're looking to invest in the right tech and talent to deliver sustainable growth.
We’ve pulled out the key findings from the responses of our UK sample. Look out for further opinion and practical insights on the key themes from our KPMG experts.
60% of CEOs are willing to take a stand on politically contentious issues, even if the Board is concerned about the risks.
Ask UK CEOs what challenges are top of mind and ‘competition for talent’ comes right down the list. Ask them what the top risks to growth are and talent is down near the bottom.
When forced to prioritise, CEOs’ focus is on emerging tech and the impact of geopolitics. Delve deeper though and it’s clear that CEOs recognise the vital importance of their people.
They recognise that they need access to the right talent to get the full benefits of emerging tech and to deliver sustainable growth. And they know that’s going to take more than upskilling their people – a huge task in itself. It’s going to mean investing in lifelong learning in communities.
- 63% say lack of the right talent will negatively impact their organisation’s growth over the next three years.
- 69% agree organisations should invest in skills development and lifelong learning in communities to safeguard access to future talent.
One area where upskilling is vital is generative AI. Only two-fifths (42%) of UK CEOs are confident that their employees have the right skills to fully leverage its benefits.
CEOs think generative AI will impact what their people do and the skills they need. But they aren’t expecting it to put people out of work. Just 2% of UK CEOs think generative AI will reduce the number of jobs in their organisations.
In fact, CEOs are optimistic about job growth, with the vast majority expecting to increase headcount over the next three years.
- 92% expect their headcount to increase over the next three years; 36% by 6% or more.
CEOs have become further entrenched in their view that employees will be back in the office full-time within three years. Last year, almost two-thirds (63%) expressed that view. This year, it’s over four-fifths (83%).
But today’s employees expect a more flexible working environment and better work-life balance. So, it will be interesting to see how CEOs’ views on the return-to-office debate play out against their recognition that the employee value proposition is key to attracting and retaining top talent.
- 83% expect a full return to the office over the next three years (63% in 2023)
CEOs are not just focusing on ESG because of regulatory requirements or because it’s the right thing to do – although both are very strong reasons. They recognise that it’s also key to achieving sustainable growth.
They say that failing to meet stakeholder expectations on ESG could see competitors gain an edge, make it difficult or more expensive for them to raise finance, and even impact their tenure as CEO.
CEOs know they need to up their game. Less than half (47%) of UK CEOs are ready to withstand scrutiny from shareholders or other stakeholders when it comes to ESG. But at least UK CEOs are more confident than their global counterparts – just 34% of our full global sample said they’d be prepared.
- Biggest downside of failing to meet stakeholder expectations on ESG: #1 Competitors gaining an edge, #2 Threat to continued tenure, #3 Difficulty raising finance.
Many organisations have made commitments to hitting net zero by 2030. Only half (55%) of UK CEOs are confident they’re going to meet them.
So, what’s getting in the way? UK CEOs say the biggest barrier is the complexity of decarbonising supply chains. That’s unsurprising given that for most companies, the majority of emissions are actually scope 3 – indirect emissions in the value chain.
CEOs also bemoan a lack of technology to gather and analyse climate data. The biggest issue here is not necessarily the tech though – it’s the lack of data in the first place.
- Just 55% are confident they can meet their net zero goals by 2030.
- Biggest barriers to hitting net zero targets: #1 Complexity of decarbonising supply chains, #2 Lack of appropriate technology solutions to gather and analyse data, #3 Lack of skills and expertise to successfully implement solutions.
CEOs don’t expect to see a significant ROI for at least three years.
If sustainability leaders want to move the dial and accelerate ESG, they need to build stronger investment cases. That’s going to take a firmer grasp of how to measure and communicate the value from sustainability initiatives.
Leading organisations are integrating sustainability into core strategies to drive profitability and long-term value.
- 86% expect it will be three years or more until they see a significant rate of return on their ESG investments.
