The chief executives behind Canada’s companies consider inflation, cost of living, new technologies, a tight labour market, and geopolitical uncertainty as factors liable to derail future growth, finds KPMG International’s 2023 CEO Outlook.
A high rate of personal confidence in the Canadian economy carries over from last year’s record optimism but is tempered an “unprecedented list of challenges and potential headwinds,” according to the ninth annual global survey from KPMG.
“Despite some softening in the economy, Canadian CEOs remain confident about the Canadian economy and their company’s growth outlook over the next three years,” says Elio Luongo, Chief Executive Officer of KPMG in Canada.
Although CEOs are contending with evolving and complex challenges, they “remain resilient and confident in their outlook,” according to Luongo.
“They are reassessing their strategic priorities and redoubling their efforts on talent management and technology while weighing the macroeconomic and geopolitical impacts on their organizations and people,” he says.
The biggest risk to Canadian companies’ growth outlook is the impact of technology disrupting their company or market, according to the KPMG report. Thus, 57% of CEOs are prioritizing more capital for technology, higher than the global average.
To mitigate risks and navigate uncertainty, Canadian CEOs see attracting and retaining top talent as their top operational priority to deliver growth moving forward, but not enough may be acting on it—43% are investing in developing their workforce’s skills and capabilities, below the global average.
“When used effectively, technology can be powerful,” explains Stephanie Terrill, Partner at KPMG in Canada. “But it needs to be tied to specific business goals to drive growth, operational efficiencies, and better customer experiences.”
There’s no magic behind tech without the talent to match it, Terrill believes.
“Talent and technology go together, hand in hand,” she says. “In a tight labour market, CEOs recognize they need to hold on to the right talent and give their employees the opportunity to upskill or retrain to deploy the technologies.”
According to KPMG’s survey, following layoffs through 2022 and a current lull in employee prospects for tech talent, 88% of Canadian CEOs are expecting to increase their headcount over the next three years.