- CEOs share more modest growth expectations over the next 12 months and remain optimistic about company performance despite uncertainty.
- Inflation and labor/skills shortage again topped the list of external issues that CEOs expect to influence or disrupt their business strategy within the next 12 months.
- The majority of CEOs (62%) anticipate increases in inflation-adjusted wages, and the majority (71%) believe the overall talent shortage will continue.
- To increase employee engagement, most organizations (87%) are allowing more flexibility and predictability in hours and location for work. However, half of CEOs (54%) believe hybrid workplace models lead to lower employee engagement and loyalty.
- Over the next 12 months, almost all CEOs (91%) anticipate investing in AI, indicating that it has the potential to differentiate their organization by accelerating insights, improving decision-making, and increasing speed to execution.
Why it matters to CEOs?
The Fortune/Deloitte CEO Survey series tracks the perspectives and actions of CEOs from the world’s largest and most influential companies. The survey gives key insights into CEOs’ priorities, challenges, and expectations across more than 15 industries, including technology, finance, and health care.
“CEOs’ outlook on the broader economy worsened significantly, but by and large they remain cautiously optimistic that their own organizations can continue to perform well in the midst of uncertainty and change. CEOs remain committed to prioritizing investments in key strategic areas including talent and digital transformation,” says Joe Ucuzoglu, Chief Executive Officer, Deloitte US
CEOs continue to adapt to a dynamic environment, including rising inflation, global conflicts, and geopolitical instability and polarization. The ongoing war for talent remains top of mind for CEOs working to identify new ways to engage and attract employees. Despite consistent headwinds, CEOs remain positive about their company’s growth and expect inflation to decrease by year-end.
“CEOs are preparing for a significant economic slowdown, yet their hunger for top talent remains unrelentingly strong. We’ve talked about ‘jobless recoveries’ for years. Now, the evidence suggests we are facing a ‘jobful recession.’ More CEOs cited ‘talent’ as their biggest challenge in our new survey than mentioned inflation or recession,” commented Alan Murray, Chief Executive Officer, Fortune
CEOs’ expectations for growth moderate
Over the next twelve months, the vast majority of CEOs (76%) shared a pessimistic outlook for the global economy as they continue to grapple with significant external disruptors, including inflation, labor and skills shortages, and increased geopolitical instability. Yet, CEOs maintain expectations for growth at more moderate levels. While 85% continue to expect modest, strong, or very strong growth, down only 6% from June 2022 (91%) and 13% from January 2022 (98%), expectations for very strong or strong growth continue to decline as expectations for modest growth increase. Only 34% of CEOs expect very strong or strong growth compared to 49% in June 2022.
Uncertainty, inflation, and the economy are top-of-mind
CEOs are managing to keep positive despite never-ending headwinds. Inflation continues to be named as one of the biggest challenges CEOs face today, despite the recognition that inflation will likely decrease by year end, to, on average, 7%. Three-quarters (74%) of CEOs ranked inflation as their top external concern, down 8% from June 2022 (82%), when asked what would disrupt their business strategy within the next 12 months.
Once again, labor/skills shortage ranked second behind inflation as external issues that CEOs expect to influence or disrupt their business strategy within the next 12 months. Compared to June 2022, when 59% of CEOs ranked labor/skills shortages as a top concern, 50% expressed the same concern in this survey. Geological instability came in third with 48%, down 1% from the last survey. Other sources of financial instability, while only mentioned by a third of CEOs (34%), is on the rise, up from 23% in June 2022. Overall, the top disruptors in this survey are consistent with June 2022 findings, yet CEOs are expressing decreasing concern around several top issues including supply chain disruption and the pandemic.