South: UK CEOs hold their nerve despite rising global threats, finds PwC
UK CEOs are investing heavily in their people and future growth this year despite rising global risks, according to the 19th PwC Annual Global CEO Survey published at the World Economic Forum in Davos.
The survey of over 1,400 global leaders, including 105 UK CEOs, reveals that 84% of UK CEOs are confident in their company’s prospects for the year ahead, and a third are very confident. This level of confidence is slightly down on last year, where 85% were confident, although 39% were very confident.
Two thirds of UK business leaders plan to increase the size of their workforce in 2016, more than any of their European peers and most of their global peers. This number is up sharply from last year, when 49% expected to increase headcount.
UK business leaders are not just looking at hiring more people, but also at investing in their current workforce. They have a stronger focus than their global peers on changing their workplace culture and behaviours, managing their talent pipeline and changing pay and incentives.
Miles Saunders, office senior partner of PwC Reading, said: “The views of the UK CEOs in this survey reaffirm what we are hearing from CEOs based here in the Thames Valley. CEOs are putting people front and centre of their plans for future growth and it’s encouraging that UK business leaders are holding their nerve against the uncertain global economic and geopolitical backdrop by planning to invest in creating new jobs and developing their people.”
However, the availability of key skills remains a concern for seven in 10 UK business leaders, despite being overtaken on this year’s risk list by geopolitical uncertainty and cyber security.
Saunders added: "Skills shortages remain an issue and many businesses in the region are finding it a challenge to find talent with the right skills to fill vacancies. Businesses and the Government have made important moves to tackle the UK’s skills gap, such as making apprenticeships schemes more widely available and visible. Greater focus is needed on training and mobility to further close the skills gap.”
While people remain at the heart of UK companies’ plans for future growth, this year’s PwC Annual Global CEO Survey suggests that UK organisations are getting to grips with technological change quicker than their global peers. 86% of UK business leaders see technological advances as the most significant disruptive trend which will transform their industry, compared to 77% globally. Accordingly, 95% of UK CEOs plan to make changes to how their organisations use technology as they embrace the digital revolution and plan for future success.
The number of UK CEOs who say that the speed of technological change is a threat to their growth prospects is down slightly to 56%, from 59% last year, and is below the global figure of 61%.
The CEOs of UK companies plan more M&A activity in the next year than any of their European peers – 64% plan to complete a domestic or cross-border deal, compared to 58% last year. The UK’s attractiveness as a place to invest also remains high, with the UK ranked as the fourth most important country for growth for global respondents, behind only the US, China and Germany.
UK CEOs remain confident in their own businesses’ prospects, yet there are growing concerns about the global economy and the number of threats their businesses face. Three in 10 think the global economy will improve this year, down from 41% last year, and the number who think it will decline has risen to nearly a quarter (23%), from 18% last year and none in 2013.
The full survey can be downloaded here. www.pwc.co.uk/ceosurvey
