- 66 percent of CEOs in India compared to 86 percent of CEOs globally anticipate a recession over the next 12 months, with more than half (CEOs in India and global) expecting it to be mild and short
- 62 percent of CEOs in India compared to 73 percent of CEOs globally believe a recession will upend anticipated growth
- 79 percent of CEOs in India and globally expect their organization’s headcount to increase over the next three years
BENGALURU: The KPMG 2022 India CEO Outlook which asked more than 125 CEOs in India about their strategies and outlook, reveals that 58 percent of leaders in India as well as globally expect a recession to be mild and short. Pandemic fatigue, economic factors- including the threat of rising interest rates, inflation, and anticipated recession, and reputational risk, top the list of most pressing concerns for CEOs in India.
Over the next year, 66 percent of CEOs in India compared to 86 percent globally anticipate a recession to hit, with 86 percent of CEOs in India compared to 71 percent of CEOs globally predicting it will impact company earnings by up to 10 percent. 62 percent of CEOs in India compared to 73 percent globally believe that a recession will upend anticipated growth.
Senior executives in India as well as globally also feel markedly more confident about the resilience of the global economy over the next six months (82 percent CEOs in India compared to 73 percent CEOs globally) than they did in February 2022 (40 percent CEOs in India compared 60 percent CEOs globally), when KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey. Further, 57 percent of CEOs in India are confident about the global economy’s growth prospects over the next three years (up from 52 percent in February 2022) and nearly 72 percent of CEOs in India are confident about their organization’s growth over the next three years.
Sharing his views, Yezdi Nagporewalla, CEO, of KPMG in India, said “Be it the business ecosystem, or supply chain or issues pertaining to talent, the magnitude of these challenges has altered dramatically and what matters is how agile business leaders are to respond. CEOs in India surveyed appear confident in their organization’s resilience, they also seem to have prepared themselves to make the most of the current environment, brought on by the promise of technology, talent, and ESG.”
“With the increasing pace of change and transformation, CEOs in India have accepted and adapted to the current needs of the modern workforce. It is indeed, heartening to note that CEOs in India are looking to increase measurement and governance to build a more robust and transparent approach towards driving a long-term ESG agenda” he added
Additional Findings :
Anticipated recession driving talent freezes
- With continued economic turmoil, there are signs the Great Resignation could be cooling down, with 33 percent of CEOs in India compared to 39 percent of CEOs globally having already implemented a hiring freeze, and 47 percent of CEOs in India compared to 46 percent of CEOs globally considering downsizing their workforce over the next six months.
- But when CEOs take a longer-term view, 79 percent of CEOs in India and globally expect their organization’s headcount to increase over the next three years
Uncertainty fueling long-term digital transformation
- The current uncertainty is driving CEOs in India to continue to prioritize digital transformation with 61 percent of CEOs in India compared to 72 percent of CEOs globally agreeing they have an aggressive digital investment strategy, intended to secure first-mover or fast-follower status
- In the longer-term, little less than a quarter (23 percent) of CEOs in India believe that advancing digitalization and business connectivity is also vital to achieving growth objectives over the next three years. 57 percent of CEOs in India also agree that their organization’s digital and ESG strategic investments are inextricably linked.
- The anticipated recession may also be pushing businesses to reconsider their strategies. 50 percent of CEOs in India compared to 37 percent of CEOs globally plan to pause or reduce their digital transformation strategy in the next six months. 28 percent of CEOs in India compared to 40 percent of CEOs globally have already paused or reduced their digital transformation strategies
Evolving focus toward reputational and technological risks
- Emerging/disruptive technology has landed as the top risk to organizational growth over the next three years for both CEOs in India as well as globally. In addition, CEOs in India have identified several other areas as top risks to growth: return to territorialism and supply chain, regulatory and environmental and climate change
- Pandemic fatigue, and economic factors- including the threat of rising interest rates, inflation, anticipated recession, and reputational risk top the list of most pressing concerns for CEOs in India today.
Cybersecurity is still a strategic function for CEOs in India
- While other risks may now feature as top concerns for CEOs in India as well as globally, the cyber environment is evolving quickly, with 66 percent of CEOs in India compared to 77 percent globally seeing information security as a strategic function and a potential competitive advantage.
- 70 percent of CEOs in India compared to 78 percent of CEOs globally view cyber strategy as critical to engender trust with their key stakeholders.
- Geopolitical uncertainty is increasing worries over corporate cyber attacks for as many as 73 percent of CEOs globally. In comparison, only 54 percent of CEOs in India view this as a concern. But that is not to say they are not taking precautions. In fact, 60 percent CEOs in India compared to 76 percent of CEOs globally say that protecting their partner ecosystem and supply chain is just as important as building their own organization’s cyber defenses
Stakeholder pressure increasing accountability in ESG
- Half of the CEOs in India (50 percent) say their organizations struggle to articulate a compelling ESG story. Nearly 62 per cent of respondents in India also believe that stakeholder scrutiny of ESG issues — gender equality, climate impacts, etc. — will continue to accelerate
- CEOs in India recognize the importance of ESG initiatives to their businesses, especially when it comes to improving financial performance and driving growth. In fact, 77 per cent of CEOs in India see stakeholder demand for increased reporting and transparency on ESG issues. This is up to a significant extent (up from 42 percent in August 2021)