15th Annual Global CEO Survey

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UK CEOs have confidence in economic growth over the next 3 years.
15th Annual CEO Survey

UK focus

UK CEOs are more confident than their Eurozone counterparts but economic volatility remains their leading concern. Despite varying confidence levels and continued uncertainty, UK CEOs are continuing to invest and 60% of UK CEOs have increased headcount globally in the past 12 months.

CEOs want more comprehensive reporting on their people
UK Partner, Jon Andrews, discusses the importance of better understanding the risks and returns from investing in talent.
View transcript

Talent is a real issue for CEOs. In fact, in our survey, a quarter of them told us they were unable to pursue certain market opportunities due to lack of talent. So having the right talent in the right place at the right time is clearly critical.

The lack of talent is not a new challenge. CEOs have been struggling with it for quite some time. In fact now they are looking for different ways to resolve the issue. 78% of them are even investing with governments in talent outside of their own organisation in order to resolve the issue.

So in practice what this means is that organisations are going to forge much stronger relationships with universities and other learning institutions. And, in turn, that means the HR function is going to have to step up in terms of the way in which it interacts with these bodies, which is a real change in the way they think through learning and development.

Confidence disrupted

Continued volatility and uncertainty have taken a toll on CEO confidence in the prospects for the business environment in 2012, with over half of UK CEOs predicting global economic decline in the next 12 months. Although confidence has been disrupted, companies aren’t on the defensive, and almost 80% of UK CEOs have confidence in their own company’s prospects, especially in the medium term.
CEOs are planning further cost-cutting initiatives in the next 12 months.

Talent in mind

Despite 85% of CEOs taking steps to continue to reduce costs, 60% of UK organisations have increased headcount in the past 12 months, with 25% expanding by more than 8%. Further, over half UK CEOs surveyed expect to increase their global headcount in the next 12 months. It is encouraging that 85% of CEOs in the UK feel that they have access to the talent they need to deliver their company’s strategy over the next three years.
Talent constraints have impacted profitability globally.

Growing close to home

Globally, CEOs are looking to grow business beyond their home base and are simultaneously building local capabilities in each of their important markets. Conversely, UK CEOs intend to stick with what they know, saying their best chance for growth in the next 12 months is more likely to come from increasing their share in existing markets, with less than a quarter (22%) looking to achieve growth from new products or services, and 18% from new geographic markets.

For UK CEOs the majority of their key business outside the domestic market is in Western Europe and North America. China is still perceived as an important territory for growth, but this has waned since last year with just 26% of CEO’s seeing the most important growth opportunities in China compared with 42% in 2011. Interest from UK CEOs in Brazil and India has also dropped.
CEOs are changing their innovation portfolios.

Interview quotes from CEOs

Tom Albanese

Chief Executive, Rio Tinto
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To give you one example, the training budget for our Oyu Tolgoi copper mine in Mongolia is more than the entire education budget for the country. A project which is big on the world stage is particularly large from an emerging country’s perspective. These are big numbers, amounting to perhaps 30% of a country’s GDP, and this means we have to have regular engagement with that country and put more effort into it.
Marijn Dekkers

Chairman, Bayer AG
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But what is interesting and what is changing is that among Western companies, the ability to hire, develop and retain talent in the developing economies has become a major point of competitive differentiation.
Tidjane Thiam

Group Chief Executive, Prudential Plc
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Culturally, we are a company focused on growth. For me cost is hygiene. It is necessary in the same way that breathing is, but breathing has never been your life strategy. It’s a necessary condition to be alive, no more. That’s how I look at cost management. You don’t cut your costs into greatness. You achieve greatness by generating more profits, being a winning company in your market. So the culture is very front-end driven.
Andy Green

CEO, Logica Plc
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We’ve definitely grown less fast than we would have liked to in some places, particularly in some of these new skill areas – business intelligence or future IT skills – because we haven’t been able to recruit and attract and train enough people fast enough.
Jaime Augusto Zobel de Ayala

Chairman and CEO, Ayala Corporation
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We had to reinvent the technology of pre-charging our phones to accommodate much smaller denominations. We had to come up with over-the-air technology that would transfer funds as needed, bring the cost down and allow people to just have the minutes in their phone that they needed for a specific period of time.
Roger W. Ferguson, Jr.

President and CEO, TIAA-CREF
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Certainly we’ve seen generational differences, particularly around social networking and the use of technology, so there are many ways in which we are listening to clients and adapting our practices to respond to the unique needs of different groups.

CEO survey: Explore the findings