CEOs of the world’s most influential companies are planning what the ‘new reality’ will look like post-pandemic. The 2021 KPMG CEO Outlook Pulse Survey finds that almost half (45%) of global executives do not expect to see a return to a ‘normal’ course of business until sometime in 2022, as opposed to 31% who anticipate this will happen later this year. The changes prompted by the pandemic have resulted in 24% of CEOs saying that their business model has changed forever by the global pandemic.
The study conducted by KPMG in February and March of this year, asking 500 global CEOs about their response to the pandemic and the outlook over a 3-year horizon. 55% of CEOs are concerned about employees’ access to a COVID-19 vaccine, which is influencing their outlook of when employees will return to the workplace. 90% of CEOs are considering asking employees to report when they have been vaccinated, which may help organisations consider measures to protect their workforce. However, 34% of global executives are worried about misinformation on COVID-19 vaccine safety and the potential this may have on employees choosing not to have it administered.
Bill Thomas, Global Chairman & CEO, KPMG, said: “Before any major decisions are made, CEOs want to be confident that their workforce is protected against this virus. The COVID-19 vaccine rollout is providing leaders with a dose of optimism, as they prepare for a new reality. CEOs are scenario planning for difference across certain key markets that could impact their operations, supply chains and people, leading to uneven economic recovery. Our research shows that some executives have taken strong measures during the crisis to transform their operating model and ways of working, accelerating the rollout of key transformational projects, some by choice, some out of necessity. The pandemic has also been a catalyst for CEOs to evaluate the role their companies play in society. Many have given voice to issues they may not have previously commented on publicly - from tackling climate change to supporting the diverse communities they operate in - and we need to keep hearing those voices. There is much more to be done.”
Key findings:
Government and vaccination rates driving decision-making
76% of CEOs see government encouragement for businesses to return to ‘normal’ as the prompt for businesses to ask staff to return to the workplace. In addition, 61% of global executives said that they will also need to see a successful (over 50% of the population vaccinated) COVID-19 vaccine rollout in key markets before taking any action toward a return to offices. When employees can safely return to workplaces, 21% of companies are looking to institute additional precautionary measures by asking clients and other in-person visitors to inform them of their vaccination status.
Global CEOs are less likely to downsize physical footprint, compared to 6 months ago
The research finds that only 17% of global executives are looking to downsize their office space as a result of the pandemic. In contrast, 69% of CEOs surveyed in August 2020 said they planned to reduce their office space over 3 years, which demonstrates that either office downsizings have taken place or, as the pandemic has drawn on, strategies have changed.
Global executives remain apprehensive about a fully remote workforce
CEOs are considering what the new reality will look like, but post-COVID-19 only 30% of global executives are considering a hybrid model of working for their staff, where most employees work remotely 2-3 days a week. As a result, only 21% of businesses are looking to hire talent that works predominantly remotely, which is a significant shift from last year (73% in 2020).
Cyber security is now the top concern for CEOs
During lockdown, remote working has become the norm, which poses new data security risks to organisations. As a result, global business leaders identified cyber security as the top concern impacting their growth and operations over a 3-year period. Cyber security was named ahead of regulatory, tax and supply chain concerns.
ESG continues to climb up the corporate agenda
With COP26 taking place this year and the US re-joining the Paris Accord, 49% of CEOs plan to put in place more stringent ESG practices. A vast majority (89%) of business leaders are focused on locking in the sustainability and climate change gains their companies have made as a result of the pandemic. Nearly all (96%) global executives are looking to upweight their focus towards the social component of their ESG programs.
Christos Vasiliou, Managing Director at KPMG in Cyprus, commented: “This year’s pulse survey indicates that the protection against the virus sits at the heart of CEOs’ decision-making for the future. It is also evident that the rate of vaccinations is the driving force in such decision-making. We can also see that the possibility of downsizing office space has reduced in comparison to a year ago, fact which may mean that strategies are changing over time. There is also an even greater percentage in the current survey recognising the importance of cyber security, the risk of which has risen sharply, as a result of the lockdown measures and the need to work remotely. Lastly, we can observe the increased importance that ESG receives on the CEOs’ agendas. ESG is expected to become even more important in the immediate future in our country.”
About 2021 KPMG CEO Outlook Pulse Survey
The 2021 CEO Outlook Pulse Survey asks CEOs from the world’s most influential companies to provide their 3-year outlook on the economic and business landscape, as well as the ongoing COVID-19 pandemic. This Pulse Survey looks at how their views have evolved since July/August 2020.
Five hundred CEOs from 11 key markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the US) were surveyed from 29 January - 4 March 2021. All respondents represent organisations that have annual revenues greater than US$ 500 million and 35% of the companies surveyed have more than US$ 10 billion in annual revenue.
