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PwC’s CEO Pulse Survey: Greater confidence, but greater disruption

CEO | Marketing Industry News | PwC | 22 July 2015

Irish CEOs are more confident than ever; plans for expansion of the workforce and capital investment are at a ten year high. Irish CEOs see more business opportunities than global counterparts but significant disruption is on the horizon. Top concerns are the risks arising from exchange rate volatility, over-regulation, rising labour costs, cyber threats as well as political change. Skills shortages are at a ten year high. These are some of the highlights from PwC’s 10th CEO Pulse Survey published this month.

Confidence at an all-time high

An overwhelming majority of Irish CEOs are confident about the economy and the prospects for their own businesses. Over nine out of ten CEOs regard the outlook for the economy as favourable in the year ahead, up from 86% last year and in stark contrast from only 3% in 2009. A similar proportion (82%) are confident about the prospects for their own business, up from 77% last year. Nearly three-quarters (71%) anticipate growth in net profits. Increasing the workforce (59%) and capital investment (62%) are at a ten year high. The survey reveals that responding companies, together, plan to create over 4,500 new jobs in the year ahead.  

More growth opportunities compared to global counterparts

Irish CEOs are more optimistic than their global counterparts. For example, 82% see more growth opportunities in their organisation today than three years ago, compared to 61% globally. The survey highlights that Irish business leaders plan to stick to core capabilities with much of the anticipated growth to be targeted in existing markets. One in ten will venture into new markets.

The top macro-economic challenges are political change (83%); exchange rate volatility (82%, up from 64% last year); over-regulation (78%) and an increasing tax burden (77%, down from 86% last year). The top business challenges are rising labour costs (80%), cyber threats (75%, up from 69%) and skills shortages (73%, up from 69% last year).  

FDI powering ahead

Over nine out of ten (92%) MNC CEOs say their investment in Ireland is a success with nearly half (49%) planning to increase this investment, up from 37% last year. Key factors to increase/maintain this investment, according to the survey, are accessing a skilled workforce (69%); maintaining our cost competitiveness (61%); retention of the 12.5% corporate tax rate (55%) and improving Ireland’s personal tax regime (35%). Over one in ten (14%) said that maintaining Ireland’s status as an attractive location for innovation/R&D is critical.

Industry disruption on the up

The survey reveals a significant amount of disruption in Irish businesses in the years ahead. Two-thirds (66%) expect organisations to compete in sectors other than their own over the next three years and is significantly greater than global counterparts (56%). Changes to customer behaviour (61%) is seen as the top business disrupter, followed by changes in industry regulation (60%), increasing competition (49%) and changes in core technologies (43%).  

More value to be got from digital

The survey suggests that Irish companies have some way to go to recognise the value from digital technologies compared to their global counterparts. For example, two-thirds say that they are achieving operational efficiencies from digital technologies, compared to well over three-quarters (88%) globally. Over half (53%) are improving innovation capacity, compared to 77% globally.

However, Irish business leaders recognise the strategic importance of specific key digital technologies, the most important ones being: data mining (82%); cybersecurity (81%) and mobile technologies (80%). Irish CEOs place less emphasis on technologies such as robotics, wearable computing and 3D printing compared to global counterparts.

Availability of key skills holding back performance

Nearly three-quarters (73%) confirmed the availability of key skills as a threat to growth, up from 69% last year and is at a 10 year high. A third confirmed that talent constraints significantly impacted company performance in the last year. Respondents noted that the impact of this constraint included delaying key strategic initiatives (49%); reducing innovation levels (49%), reducing production/service deliveries (36%) and hampering new market opportunities (30%).

The survey highlights a resounding rethink of important talent performance management tools. Well over three-quarters (84%) confirmed the need to redefine their talent requirements more robustly in line with growth objectives. There is considerable scope for HR to provide more strategic support to the business. While just over half (56%) of survey respondents reveal that HR is part of the executive team, inputting to key decisions, over a quarter (28%) do not sit at ‘the table’ at all.

Reducing personal tax is the top Government priority

The top Government priorities, according to the survey, are reducing personal tax (53%); continued promotion of Ireland as having an efficient, transparent and competitive tax regime (34%) and reducing public sector costs (33%). 

This survey was originally published on PwC.ie

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