KUALA LUMPUR, 26 January 2011 – Two years after the financial meltdown, the confidence level among CEOs in Asia Pacific is returning to near pre-crisis levels. In PwC's 14th Annual Global CEO Survey, 54% of chief executives in the region say they are “very confident" of growth in the next 12 months, compared to the global average of 48%. This is an increase from the previous year when only 40% of CEOs in Asia Pacific felt this optimistic.
Renewed confidence was spread across all countries within the region. CEOs in India (88%), China and Hong Kong (72%), and ASEAN (60%) were particularly upbeat about near term growth. Japan was the least confident (25%). Globally, chief executives in Western Europe were not as optimistic as their Asian counterparts, with only 39% expressing their confidence that things are finally turning around. In the longer term, 95% say they have some level of confidence for growth prospects over the next three years, an increase of six percentage points from the year before.
Asia continues to be firmly on the radar for CEOs globally. Almost 90% expect their operations to grow in the region in the next year, with China and India considered key markets for future growth. Emerging economies are growing at rates faster than the developed countries, a lot of it in Asia. This is reflected in CEOs’ hiring plans, with more than half (62%) of Asia Pacific CEOs expecting to add jobs in the next 12 months, up from 49% in the last survey. Significantly, just 10% of CEOs said they expect to cut their workforce this year, down from 16% last year.
“From the survey, it is clear that talent is now top of the agenda for Asia Pacific CEOs in 2011. They’ve identified three major challenges for talent over the next three years: a limited supply of candidates with the right skills (63%), losing top people to competitors (47%) and difficulty of deploying top talent globally (47%),” said Chin Kwai Fatt, Managing Director of PwC Malaysia.
“In high growth markets such as China and India, having enough talent and the right type of talent is crucial. As an emerging market, Malaysia is no different. There’s no doubt that a business is only as good as the people it has. The costs in lost productivity and re-training are by no means negligible. So, CEOs must put in place strategies to improve employee engagement and retention. This will also strengthen our nation’s talent pool – an important role that businesses can play to help achieve Malaysia’s economic transformation to a high income nation,” continued Chin.
The survey findings also show that CEOs in the region are planning to invest in their people’s growth, and not through monetary compensation alone. Businesses are stepping up overseas deployments of key employees (65%).
“Interestingly, 44% of CEOs in the region say they will tap on women as an under-utilised source of talent. 49% say they want to retain workers past their retirement age. This is a positive sign, a good move by employers to make use of our diversity, and the various levels of experience and skills sets it brings,” said Chin.
Yet, CEOs don’t necessarily want to go it alone. They increasingly call for a shared agenda with government in areas deemed critical for business growth. Up to 78% of CEOs in the Asia Pacific say they will actively support new government policies that promote ‘good growth’ that is financially, socially and environmentally sustainable. Outcomes like improving the skills of the workforce and improving infrastructure are best achieved through sustained collaboration between public and private sectors.
With the recent recession still fresh on their minds, and a change in customer needs, CEOs have changed, or are changing, their strategies. Innovation is key, with an emphasis on developing new products and services for key growth markets. Getting the right talent in place and working closely with partners and the government are some of the changes CEOs are instituting to compete in a new world order.
You can download the full report on www.pwc.com/ceosurvey.
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