Market Growth, Talent and Climate Change: What’s Top of Mind for CEOs has been saved
Market Growth, Talent and Climate Change: What’s Top of Mind for CEOs
The results of the latest Fortune/Deloitte CEO Survey reveal that a growing number of chief executives expect pandemic disruptions to continue while remaining bullish about growth, focusing on talent, and taking action on climate change.
NEW YORK, October 28, 2021
- Nearly a third of surveyed CEOs do not see business effects of the pandemic ending in the “foreseeable future.”
- Two-thirds of CEOs expect their organization’s growth to be “very strong” or “strong” over the next 12 months.
- Talent remains a top priority for CEOs. Nearly three-quarters of CEOs say they expect labor and skills shortages to influence or disrupt their strategy over the next 12 months.
- The climate agenda is coming into sharper focus for CEOs, with 90% agreeing that climate change must be addressed urgently, and 86% saying that their organization can play a positive role.
Why it matters to CEOs
The Fortune/Deloitte CEO Survey series tracks the perspectives and actions of CEOs from the world’s largest and most influential companies. The survey gives key insights into CEOs’ priorities, challenges, and expectations across 15 industries, including technology, finance and health care.
Four months ago, more than half of surveyed CEOs thought that the business effects of the pandemic would be over by the end of 2021. The most recent survey finds that a strong majority of surveyed CEOs now expect those disruptions to continue into 2022 and beyond. However, CEOs remain bullish about their growth outlook, with two-thirds expecting their organization’s growth to be “very strong” or “strong” over the next 12 months. They also continue to cite talent as a key challenge.
Pandemic-related disruptions: Part of a new normal?
In the summer of 2021, only a small majority of CEOs said they thought the business impact of the pandemic would continue into 2022. Now, CEOs have adjusted their expectations. Down from 53% in June 2021, 11% now say that business effects of the pandemic will be over by the end of 2021; 23% say by mid-2022, and 35% say by the end of 2022. Nearly a third of surveyed CEOs do not see business effects ending in the “foreseeable future.”
Even so, a strong majority of CEOs continue to have a bullish outlook, with only a minor downsizing in expectations for growth. Two-thirds of CEOs expect their organization’s growth to be “very strong” or “strong” over the next 12 months, down from 77% in June 2021. Just under a third expect “modest” growth, and a fractional 3% expect “weak” growth. Approaching two years into the pandemic, depending on geography, perhaps CEOs are confident that their organizations have already adjusted and adapted to a “new normal,” marked by the enduring uncertainty of COVID-19.
Current challenge: Talent
When asked about the biggest challenge they face, nearly half of CEOs name challenges relating to talent — up from a quarter in the summer survey. Some illustrative responses include “the war for talent,” “attracting top talent,” and “developing the workplace, workforce and the work plan for the new normal.” Asked separately about the top three challenges to their organization’s talent and workforce goals, the majority of CEOs name attracting and recruiting talent (57%), designing a post-pandemic workplace (53%), and retaining talent (51%). Building a diverse, equitable and inclusive workforce is also high on the list of challenges for 43% of CEOs.
What actions have CEOs taken to strengthen their ability to attract and retain talent in the past 12 months? Their responses indicate they’ve tried a lot, from offering more time off to more training and development to more pay. Four out of 5 CEOs (80%) have increased flexibility around work. A majority of CEOs say they have also increased: emphasis on corporate purpose (68%); focus on DEI (68%); emphasis on well-being and mental health (65%); and attention to culture (58%). Exactly half have given more emphasis to ESG (environmental, social and governance), half have increased pay, and just more than a quarter have distributed one-time retention bonuses.
Expectations for business growth remain strong, as investments in digital transformation and innovation continue to drive a positive economic outlook. Attracting and retaining talent in a tight labor market has ascended to the top of CEOs’ list of strategic priorities, further reinforcing the imperative of infusing purpose and stepping up commitments to help solve complex societal issues such as climate change.
CEOs remain optimistic about the business outlook, but the battle for talent has become a steadily rising concern. In a world where human capital has become the biggest business differentiator, companies are looking for new ways to attract talent; addressing concerns about climate change has become table stakes in that effort.
Climate comes into focus
An overwhelming majority, 90% of surveyed CEOs, agree that climate change needs to be addressed urgently, and 86% of CEOs believe that their organization can play a positive role in addressing climate change. Furthermore, a strong majority of CEOs do not believe that their climate agenda will negatively affect either short-term growth (68%) or their long-term shareholder value (76%).
In fact, more than 70% of CEOs agree that, more than not, their investors support a proactive climate agenda, and three-quarters of CEOs say their organization is collaborating externally to advance collective action on climate. CEOs also see benefits vis-à-vis talent: 85% agree that executing on their climate agenda will positively affect their ability to attract, retain and engage their workforce.
Skeptics will note, however, that 29% of CEOs say their organization does not have a plan to reach net-zero global carbon emissions. On the bright side, 70% of CEOs say that their organization will reach net-zero carbon emissions by 2050 (the deadline shared by climate scientists and the United Nations to avoid surpassing the 1.5 degrees Celsius warming threshold), including a handful of surveyed CEOs (4%) who have already achieved that goal, and 29% who say they plan to reach net-zero carbon emissions by 2030.
Fielded between Sept. 14-22, 2021, 117 leading CEOs across 15 industries shared their perspectives, expectations, thoughts and priorities for the next 12 months. Surveyed CEOs include Fortune 500 CEOs, Global 500 CEOs, and CEOs who attend Fortune events.
Check out the full report here: https://www2.deloitte.com/us/en/pages/chief-executive-officer/articles/ceo-survey.html.
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