Despite an anticipated recession South African CEOs are already mitigating in opposition to anticipated dangers with hopes of shaping business growth over the subsequent few years.
This is in line with KPMG’s 2022 CEO Outlook Survey, which examined 1 325 CEOs around the globe on their three-year perspective on business, inflationary pressures, and geopolitical tensions. The analysis was launched regionally in Sandton on Monday.
“A promising 72% of local executives have already taken steps to boost productivity in preparation for [the] anticipated recession, indicating CEOs are cautiously focused on future opportunities during such uncertainty,” says KPMG South Africa CEO Ignatius Sehoole.
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However, within the quick time period, the survey reveals that 82% of native CEOs, in comparison with 75% globally, have already applied or plan to implement a hiring freeze within the subsequent six months to cushion operations in opposition to the anticipated recession.
On the opposite hand, 88% of native CEOs, in comparison with 80% globally, have indicated that they’re contemplating downsizing their worker base within the subsequent six months.
The survey revealed that CEOs are prioritising expertise, expertise and ESG (environmental, social and governance) initiatives to develop their companies.
It says 84% of native executives are specializing in digital investments, with 58% allocating extra capital funding in direction of shopping for new expertise.
Risks
The report notes that forward of provide chain and regulatory dangers, disruptive expertise has emerged as the highest threat and biggest menace to organisational growth over the subsequent three years with many CEOs citing it as a precedence.
It signifies that 82% of native CEOs stated they’re ready for cyber assaults, in comparison with 56% globally.
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Another precedence for CEOs is the attraction and retention of expertise of their companies.
“CEOs in South Africa are changing how they support and attract talent, and their efforts are buoyed by a focus on their people and experimenting with ways of working,” reads the report.
It notes that 70% of native executives anticipate to extend the headcount over the long run to deal with growth goals, in comparison with 76% of international executives.
Sehoole says a broadly shared view from native executives is their choice for his or her workforces to return to the workplace on a full-time foundation in three years.
ESG
The report says CEOs recognise the significance of ESG initiatives to their business, with an emphasis on bettering monetary efficiency and driving growth, stating that 54% native CEOs agree with assembly environmental, social and governance necessities, in comparison with 69% globally.
Sehoole says the largest problem going through native CEOs in delivering on their ESG methods over the subsequent three years is figuring out and measuring agreed metrics, in comparison with urgent business or financial issues stemming from ESG for international CEOs.
“While we know there is a lack of an accepted global framework for measuring and disclosing ESG performance, the KPMG survey revealed that 65% of stakeholders [institutional investors and employees] are demanding greater ESG transparency and reporting, and 60% of CEOs noted that 10% of their revenue would be allocated to invest in programmes to enable organisations to be more sustainable,” he provides.
Local optimism?
Sehoole says the boldness within the resiliency of the worldwide financial system over the subsequent six months is encouraging to see, with 64% of native CEOs being optimistic compared to 73% of international executives.
Responding to the survey’s findings, Business Leadership SA CEO Busi Mavuso says South Africa can be getting into the anticipated recessionary interval on “an extremely weak footing”. She provides that this is because of excessive ranges of poverty and unemployment which make the nation weak to the results of a world slowdown in financial exercise.
She says on this context, the nation desperately wants the worldwide financial system to get well shortly and resume growth to carry our financial system together with different rising markets.
Mavuso notes that South Africa’s personal sector is as much as world-class requirements on the subject of business expertise.
“Where SA is lacking however, is in integrating fourth industrial revolution [4IR] technologies into our education system. 4IR encapsulates the rapid changes to technology, industries and societal patterns and processes due to increasing interconnectivity and smart automation,” she says.
Read: Skills disaster is holding again funding and growth: Mavuso
Mavuso provides that the abilities scarcity within the nation will stay power for a while to come back, whereas native firms proceed to buckle underneath “too many restrictions and overly bureaucratic procedures” on the subject of hiring expert personnel from exterior of the nation.
“Grappling with many structural constraints including insufficient energy supply and inefficient transport and ports systems, SA will struggle to keep up with the global growth anticipated in this survey until the reforms to address the problems are successfully implemented,” she says.
“It is only through economic growth that we can sustainably address our deep social challenges.”
Listen to this Fix SA podcast with Jeremy Maggs chatting with Standard Bank CEO Sim Tshabalala (or learn the transcript):
Nondumiso Lehutso is a Moneyweb intern.