10 Years Of KPMG’s CEO Outlook Report Show Changed Feelings On Talent

The statistic from KPMG's 2024 CEO Outlook report making the social media rounds is that 83% of CEOs expect a full return to the office over the next 3 years, up from just 63% in 2023. That widely reported statistic may have drowned out other key findings from the report; namely, CEOs have a lot of optimism regarding both their company and economic growth prospects. To fuel that growth, they know they have to have a keen focus on talent.

"One of the things that stood out to me in the report is that CEOs are concerned about a shifting labor market," says Nhlamu Dlomu, global head of people at KPMG International. "They wonder if they will have enough skilled people. They've got experienced people ready to retire, so they need to diversify their talent pool appropriately." Whether it's the impact of generative AI, retirees wanting to stay involved in work part-time, or Gen Z questioning the current work system and structure, companies need to get ahead on their talent strategy. "It's not easy, but we will need to experiment with different models and diversify the way we've been thinking about our talent," says Dlomu.

Companies know this. According to the report, 92% of CEOs expect their headcount to increase over the next three years. But to do that means businesses have to be intentional in who and how they recruit, and they have to treat their people well regardless of the economy or job market. "It's tempting to ignore the important retention drivers when there is talent availability and businesses feel like they are in the driver's seat," says Dlomu. She's right; we're in a climate of businesses behaving badly because they currently hold more bargaining power. When that shifts, those who chose not to treat their people well will miss out on growth opportunities because top talent will leave.

Speaking of growth, 75% of CEOs are confident in the future of their company, and 70% are confident in the global economy. But looking at that trend over time is illuminating. "Our findings on confidence in the growth prospects of the global economy over the next three years are quite interesting this year," says Regina Mayor, global head of clients & markets at KPMG International. "Nearly three-quarters of CEOs told us they remain optimistic, which is a pretty solid figure, but if you compare it to our first ever CEO Outlook survey back in 2015, when the figure was 93%, you can see that there's been a steady decline in confidence, mirroring the growing uncertainty in the world right now."

Mayor expands on the point. "While the statistic might be on a downward trend, the fact that so many senior execs remain optimistic, I believe, is a sign of their resilience and agility."

Talent is one key factor fueling this optimistic view on growth. In fact, the importance of the employee value proposition was identified as the number two priority to drive growth, and 63% say a lack of the right talent will negatively impact their organization's growth over the next three years. "It's about providing a deal that you are proud of and that you maintain," says Dlomu. This begs the question of if the focus on talent has changed since the first report came out 10 years ago. "CEOs have always valued their talent, but whether the conversation has been happening in the board room as much is what the question is," says Dlomu. She acknowledges that the pandemic accelerated this change, "but it's also highlighted the need to put the talent conversation right in the center of the boardroom conversation."

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Another factor in retaining talent that Dlomu calls out is internal training. "CEOs are talking about the concern that they'll have their most experienced people leave — and they aren't sure they'll have the right talent. A more thoughtful and intentional medium and long-term plan about how you provide upskilling opportunities for your people given business aspirations is needed."

What are the perils of getting your talent strategy wrong? "The first one is reputation. We become attractive or unattractive to people based on how we manage our talent," says Dlomu. "Another risk is high employee turnover. Of course, we can replace talent, but it's quite expensive. The cost and reputational risks of getting this wrong are high."