Uncertain economic growth, lack of key skills among top Canadian CEO concerns
TORONTO — Canadian CEOs are showing greater levels of uncertainty about global economic growth, with 63 per cent (vs 53 per cent globally) predicting a decline in the rate of economic growth in 2020. According to PwC’s CEO Survey, the top concerns for Canadian CEOs in 2020 include uncertain economic growth, policy uncertainty, availability of key skills and climate change.
More than half of Canadian CEOs (63 per cent) believe economic growth prospects will decline over the next 12 months compared to 14 per cent who believe it will improve. Despite a subdued global economic outlook, 70 per cent of Canadian CEOs are still somewhat or very confident about their organizations’ potential for growth in the next year. Most will continue to focus on organic growth and operational efficiencies, rather than looking to international markets to unlock growth. Only 44 per cent consider the US a key market for their organizations’ growth prospects, down from 60 per cent in 2019 and 88 per cent in 2018.
“Canadian CEOs from St. John’s to Victoria are firmly focused on succeeding in times of uncertainty,” says Nicolas Marcoux, CEO and Senior Partner, PwC Canada. “Regardless of industry and geography, they’re largely grappling with the same themes as they look to uncover growth in a slow growth environment. These include the imperative to upskill their workforce, integrate environmental practices into their operations and safeguard their organizations from increased cyber security risks.”
Upskilling workforces to be future ready
The majority of Canadian CEOs (75 per cent) are concerned about the availability of key skills in their industry. In today’s tight labour market, attracting talent with the key skills of the future is challenging and more organizations are developing programs to upskill their talent from the inside. Canadian CEOs admit they’re lagging in establishing upskilling programs that take on a more holistic approach by developing the right mix of soft, technical and digital skills.
Some CEOs indicated that they see certain benefits to upskilling, such as improved culture and retention. Others, however, find it challenging to prove that their upskilling efforts have been effective at increasing workforce productivity, growing the business or fostering innovation. This could be attributed to not having the right upskilling programs in place or not being able to properly measure their program’s effectiveness.
Navigating climate policy in Canada is becoming more pressing as investors and boards increasingly require ESG metrics. While the issue may have opposing views depending on the industry, Canadian CEOs are taking notice. More than half (62 per cent) are concerned about climate change and environmental damage as threats to their growth.
The report indicates that there’s growing awareness around the benefits of climate action, not only in terms of investment and reputation, but in the development of new products and services. They see the opportunity to develop environmentally sustainable products and processes (e.g. reducing packaging, improving manufacturing processes, etc.).
Increasing complexity of cyber threats
Cybersecurity is also top concern for Canadian CEOs. They are seeing a shift in what it takes to protect their organizations and security, financial crime, safety, reliability, privacy and data ethics become increasingly complex and intertwined. The majority (90 per cent) say the increasing complexity of threats is having the greatest impact in shaping their cybersecurity strategy, compared to 75 per cent last year.
“Canada’s digital economy is thriving and with this comes the need for Canadian businesses to balance cyber risk with their digital transformation journey,” adds Marcoux. “Public and private sector collaboration is essential to ensure that cyber and data privacy laws are sound and developed with the best interests of Canadians in mind.”
Only a quarter of Canadian CEOs, however, say that governments are designing privacy regulations that actually increase consumer trust and that governments and businesses are effectively collaborating to harmonize cybersecurity strategies.