Business leaders are torn between their daily lives and the necessary transformation of their company. A quarter of them even go so far as to fear that it will no longer be viable in ten years, but many of them say they are too caught up in the challenges of operational performance. Could there be a bit of procrastination behind all this?
Inflation, interest rates, recession, erosion of household purchasing power, labor shortages, distortion of the supply chain, but also pressure from shareholders for immediate returns… The CEOs of company complain of devoting too much time to meeting the challenges and issues of day-to-day management. In Canada, a quarter of them say they doubt the viability of their business in ten years without changing the current way of doing things. But many say they don’t put the time and effort into it.
Grasping daily life or procrastination? Yet climate change appears on the list of emergencies for these CEOs — who go so far as to speak of an immediate impact — with many believing that this climate risk will modulate costs and the supply chain over the next 12 months. . Yet globally, one-third of these executives do not plan to reduce their company’s emissions or have not yet implemented their reduction plan. In Canada, we are talking about half (49%) of CEOs who do not plan to work on reducing the carbon footprint of their company or who have not started to take the necessary measures.
This finding emerges from the 26e global survey by professional services firm PwC of 4,410 CEOs globally and 192 across Canada.
High pessimism
Attention therefore remains focused on the other immediate challenges, with, roughly speaking, three-quarters of respondents mentioning having to combine with a slowdown in the global economy. Inflation, high interest rates, geopolitical tensions… “This level of pessimism is the highest we have seen in our survey for ten years,” says PwC.
Faced with labor shortages, only 18% of CEOs are considering a hiring freeze over the next 12 months to ease economic hardship. “CEOs are cutting costs, but not headcount or compensation. Thus, 85% plan not to reduce staff compensation in order to retain talent.
The Bank of Canada’s January 2022 Business Outlook Survey also found that many respondents who said they expected reduced demand were maintaining a cautious approach to hiring. . Still, nearly half say they plan to hire staff to meet anticipated sales growth or fill vacancies.
In terms of remuneration, fewer companies than in the previous survey mentioned higher salary increases in order to attract or retain workers. Fewer companies also said they were suffering from labor shortages. The results of the Canadian Consumer Expectations Survey released at the same time showed that workers continued to expect modest wage growth.
Coming back to PwC, many plan to invest in digital transformation projects, such as automating processes and systems and using the cloud, artificial intelligence and other advanced technologies. Finally, cybersecurity and the protection of personal information come to the fore. Notably, nearly half of Canadian CEOs (49%) plan to invest in supply chain resilience to mitigate exposure to geopolitical conflict over the next 12 months, the survey reads. .
And SMEs?
Among SMEs, inflation has replaced the pandemic in terms of monopolizing the daily lives of many owners. Thus, 64% of SME managers say they still suffer significant impacts from rising prices, according to a study by the Canadian Federation of Independent Business (CFIB) published Monday. In response, 73% talk of raising prices, 59% of working more hours to reduce labor costs, 43% of reducing the profit margin in order to remain competitive and 32% of reducing investments.
Ten years from now, the immediate challenge is business transfer, with 76% of small business owners expecting to hand over. CFIB puts the value of business assets at stake at $2 trillion.
Retirement is the main reason cited by 75% of respondents. For 22%, it’s because of exhaustion and for 21%, it’s to take a step back from their responsibilities. “Given the severe consequences of the pandemic, it is not surprising that many entrepreneurs have changed their starting plan. This is the case for almost 4 out of 10 owners: 17% have moved ahead of it, while 22% have postponed it for at least a year, often due to heavy pandemic debts or a significant drop in value of their business during the pandemic,” adds CFIB.