Despite concerns about the cost of living and interest rates, Australian and global CEOs remain optimistic about their companies’ growth prospects over the next three years, according to KPMG International’s annual CEO Outlook survey. Just under 80% of CEOs expressed optimism for the short-to-medium-term outlook.
Australian CEOs were slightly more bullish than their global counterparts, with 26% predicting growth of over 5%. However, concerns about potential job losses were higher among Australian CEOs, with 22% anticipating staff cuts of up to 5% over the next three years compared to 8% globally.
Key Concerns for Growth
Some of the key issues perceived as threats to potential growth by Australian CEOs include cybercrime and insecurity (84%), the cost of living (82%), trade regulation (74%), and disruptive technology (70%). Notably, talent issues have slipped down the list, with only 58% of Australian CEOs seeing them as impacting growth over the next three years compared to 68% globally.
Generative AI and Ethical Challenges
Generative AI is a top investment priority for CEOs globally (70%), though slightly lower among Australian CEOs (56%). Australian leaders tend to see a longer payback period for investments in this area. While generative AI offers increased profitability and job creation, Australian CEOs have ethical concerns (66%), with technical capability and skills being key concerns (60%). Other issues include a lack of regulation (62%) and the cost of implementation (52%).
Cyber Threats and Preparedness
Australian CEOs express concern about cybersecurity, with 69% acknowledging that AI might help fight cyber threats but could also provide new attack strategies for adversaries. Worryingly, 41% of Australian CEOs feel their companies are under-prepared for a cyber attack, compared to 20% globally.
ESG Challenges and Priorities
Despite the rising focus on environmental, social, and governance (ESG) issues, 80% of Australian CEOs admit that their current ESG progress is not strong enough to withstand potential scrutiny from stakeholders or shareholders. When prioritizing ESG aspects in their investment strategy, 51% of Australian CEOs mention “Governance models and reporting.”
While most companies have embedded ESG into their strategy for value creation, technical capabilities and skills are key concerns (60%), along with a lack of regulation (62%) and the cost of implementation (52%).
Return to Office
Two-thirds of CEOs, both in Australia and globally, believe that in three years’ time, traditional white-collar roles will be fully based back in the office. A majority (89% globally, 75% in Australia) indicate that they will reward employees who make the effort to come into the office with raises, promotions, and better projects.
Societal Issues and CEO Roles
Fewer Australian CEOs (44%) than global CEOs (64%) believe that the public is looking for businesses to take the lead role from governments in societal challenges. A smaller proportion of Australian leaders (54% compared to 66% globally) think that issues related to inclusion, diversity, and equity have moved too slowly in the business world.
Additionally, fewer Australian leaders (46% compared to 61% globally) say they are willing to take a stand on politically or socially contentious issues if their boards have concerns.
