UK CEOs in hiring mode despite heightened concerns about the global economic outlook
-CEOs bullish about business prospects and recruitment, despite nearly three-fold increase in number of CEOs expecting global growth to decline
-Intention to hire accompanied by concerns about skills shortages – CEOs’ top concern – and 72% believing AI will significantly change the way they do business in the next five years
The majority (61%) of UK business leaders expect to increase headcount in 2019 fuelled by a desire to access key skills. This is up from 54% last year and compares with 53% of CEOs globally, according to PwC’s 22nd annual CEO Survey, published at the World Economic Forum in Davos.
UK CEOs are also optimistic about their organisation’s growth over next 12 months, with 82% confident about their revenue prospects, in line with global responses. However, this is down on last year, when 88% expected to see revenue growth within the year. There has been a similar dip in confidence about revenue prospects for the next three years (a fall of 6% from 96% in 2018 to 90% in 2019 in the UK).
With regards to global economic growth, UK CEOs are more pessimistic. The percentage expecting a decline over the next 12 months has nearly tripled over the past year, rising from 12% in 2018 to 34% in 2019.
The jump in pessimism has been even steeper for CEOs globally, rising from 5% last year to 30%. Overall though, global business leaders are slightly more optimistic than UK CEOs: 42% expect global economic growth to improve (33% in the UK) and 28% expect it to stay the same (again, 33% for the UK).
Kevin Ellis, chairman and senior partner of PwC, said:
“Uncertainty is at the forefront of UK CEOs minds, but they know regardless of market conditions, there are always opportunities for growth. By investing in talent, technology and developing new business models, companies can adapt and innovate to thrive. CEO confidence on hiring is a very positive sign.”
The availability of skills is the top business concern for UK CEOs at 79%, and perhaps explaining their intention to step up recruitment. Some, 72% of UK CEOs agree that Artificial Intelligence (AI) will significantly change the way they do business in the next five years. However, at this point in its adoption curve only 2% of UK CEOs have introduced AI initiatives wide scale and 36% have no plans to pursue any AI initiatives in the next three years.
Kevin Ellis comments:
“AI presents a huge opportunity to fuel growth across the UK as it’s location agnostic. Business needs to lead the charge, preparing and adopting AI technology and looking beyond recruitment, to training the workforce of the future. This is a chance for UK business to demonstrate its positive role in society, working with government and education providers. New tech apprenticeships are a great example of this starting to happen.”
CEOs across the world have also become more uncertain about where to invest. While the UK remains the fourth (now joint with India) most important market for growth behind the US, China and Germany, the percentage of CEOs saying they aren’t sure has risen significantly over the past year.
“For the UK, CEOs’ growing uncertainty about where to expand presents an opportunity to attract new investment following Brexit. It’s time to talk up the UK’s credentials, not only as a competitive place for business, but as a fair and trusted one. We’re at a pivotal moment in economic and political history. Now more than ever, CEOs have the chance to reset the narrative on the role of business in society and build trust. ”
Other UK findings
-Trade conflicts, policy uncertainty, and protectionism have replaced terrorism, climate change and increasing tax burden in the top ten list of threats to growth for CEOs globally
-UK CEOs are marginally more concerned about exchange rate volatility (68%) than their global counterparts (66%) but less concerned about trade conflicts (65% vs 70%)
-Cyber security is a top concern for 79% of UK business chiefs for their organisation’s growth prospects
-UK business leaders are less concerned about climate change than their global peers (44% vs 57%), perhaps because the UK has a relatively strong track record in this regard