Canadian: majority of CEOs ‘somewhat’ confident for revenue growth in future
People issues are huge factor in growth projections
Toronto Reflecting typical Canadian humbleness, the annual PricewaterhouseCoopers (PwC) Global CEO survey has found that the majority of Canadian CEOs (59%) are ‘somewhat confident’ for revenue growth in the next year and 63% over the next three years. This compares to the global percentages of 49% and 51% respectively.
“Given the current economy, it’s not surprising that CEOs in Canada are modest in their projections for growth in the coming years,” says Dean Mullett, Co-Head of PwC Canada’s Economic and Credit Crisis Task Force. “That said, those companies that are well prepared to manage through this downturn do have a much more positive outlook and know that they will come through better in the end.”
The PwC Global CEO Survey is based on interviews with 1,124 CEO across 50 countries. In Canada 41 CEOs were surveyed.
According to the survey, Canadian CEOs are much more likely than their global counterparts to be looking inwards for growth, with the majority (54% Canadian vs. 37% globally) saying that their main opportunities to grow their business will come through better penetration of existing markets. This was followed by M&A (25% Canadian vs. 13% globally) and new product development (20% Canadian vs. 17% globally). The majority, expect to finance the growth through internally generated cash flow (88% Canadian vs. 76% globally), followed by the debt market (37% vs. 18% globally) and private equity (27% vs. 19%).
“We’ve also found that CEOs in Canada are more likely to feel that the recent problems in the markets will increase the cost of finance, delay investment plans and reduce their ability to enter new markets,” says Mullett. “Companies need to understand how their business is being impacted by the downturn the true picture not what you would like to believe. Get to the bottom of what is driving the business; what you do best and why.”
While the survey showed that 83% of Canadian CEOs are either extremely or somewhat concerned with the downturn in major economies, 63% are also either extremely or somewhat concerned with the availability of key skills (46% globally) as a threat to their growth prospects. Eighty-one percent of Canadian CEOs say that they can’t find the right skills in the available labour pool, with a further 85% citing both retention of key employees and recruiting and integrating younger employees as challenges they face.
“Labour shortages and talent management issues kept coming up in our survey,” says Bonnie Flatt, a Director with PwC Canada’s Human Resource Services. “Businesses need to keep focused on their long term people strategy during these challenging times. Failure to do so could mean they do not have enough people for the upturn and lose competitive advantage.
Indeed, 100% of Canadian CEOs surveyed said that access to, and the retention of key talent was the most important source of competitive advantage in sustaining their growth over the long-term. Further, 95% stated that information about their employees’ views and needs is critical to the decisions made about the future success of their business. Additionally, Canadian CEOs are much more likely than their global counterparts to be attuned to demographics and health and wellness issues: 46% in Canada vs. 30% globally for demographic changes and another 46% in Canada vs. 29% globally for health and wellness.
“To combat the people challenges, Canadian CEOs are offering a more flexible work environment, redeploying pivotal employees within the organization and collaborating with networks of external specialists to attract talent,” notes Flatt. “It is all about creating an employer brand and employment relationship that will attract, motivate and retain top talent. This means looking not just at how much you pay people, but developing rich and varied career opportunities for your people, defining and communicating your culture and aligning your HR programs and processes to support and enhance your employer brand.”