As CEOs continue to transform their organizations and are increasingly concerned about product relevance, customer loyalty and keeping current with new technologies, a new study released by KPMG International tracks insights on global hiring trends for the next three years.
According to the 2015 KPMG CEO Outlook Study of 1,278 CEOs, 69 percent of CEOs in Europe, 66 percent in Asia Pacific and 52 percent in the US are more confident than they were last year about growth and the global economy in the next three years.
In assessing their own company’s growth prospects, 70 percent of European CEOs and 68 percent of Asia Pacific CEOs indicated they are more confident than a year ago. In the US, where the recovery is well underway, 19 percent are more confident than a year ago with another 46 percent expressing the same level of confidence about their prospects for growth.
Most importantly, CEOs globally are set to hire, with 78 percent of respondents indicating they are expecting to be in hiring mode through mid-2018. John Veihmeyer, Global Chairman of KPMG International said, “There is a more positive change in confidence versus the prior year, in Europe and Asia compared to the US, which is in part reflective of the US being in a more advanced stage of the economic recovery.”
According to the KPMG study, CEOs are grappling with escalating competitive pressures. In order of importance: 86 percent are concerned about the loyalty of their customers; 74 percent are worried about new market entrants; 72 percent are worried about keeping pace with new technologies; 68 percent are concerned about their competitors’ ability to take business away from them; and 66 percent are concerned about the relevance of their product or service in the next three years.
While 29 percent of leaders said their organizations are likely to be transformed into significantly different entities in the next three years. Only 44 percent of the CEOs indicated that they are only ‘somewhat comfortable’ with their current business model, with five percent expressing that they are ‘uncomfortable.’
Globally, CEOs have set their sights on the following: developing new growth strategies, having a stronger client focus, expanding geographically, reducing their cost structures, enhancing speed to market, and fostering innovation. Some of the key issues cited by CEOs impacting growth of their company are regulatory environment, disruptive technology and global economic growth.
Majority of the CEOs according to the survey would like to devote significant part of their capital over the next three years into expansion outside their home countries, wherein CEOs are most focused on expansion into Europe, especially Central Europe, followed by South America and China. For CEOs in China, Japan, the United Kingdom, Germany, Spain and France, the US is the region offering the greatest potential for new growth.
Veihmeyer added: “The resiliency of the US economy makes the US an attractive investment target for companies based in Europe and Asia.” 52 percent of the CEOs agree that their growth strategies are built primarily around organic growth, while 42 percent believe it is a careful mix of both organic and inorganic growth through acquisitions. Anticipating growth strategies over the next three years, 29 percent of the CEOs in US demonstrated a more acquisitive strategy, identifying inorganic growth as a main growth driver.
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