Tech investments also prioritized to drive long-term business transformation
CEOs across New Zealand are investing more in talent to drive long-term transformation amid concerns on inflation and macroeconomic volatility, according to a new report.
PwC's 26th annual Global CEO Survey, which included 142 New Zealand CEOs, found that 86% are investing in upskilling their workforce in priority areas in the next 12 months.
At the same time, 92% are developing leadership and talent to drive the productivity of their workforce, according to a media release from PwC.
The findings come as CEOs grow more pessimistic about the global and local economic outlook, according to the report.
PwC's findings revealed that 79% of local CEOs think global economic growth will decline in the next 12 months, while 76% believe the same thing will happen to the country's economic growth.
This "increased pessimism" from New Zealand's executives is "not surprising" given the challenges over the past years, according to Mark Averill, CEO and senior partner at PwC New Zealand.
Among the respondents, 38% said they feel extremely or highly exposed to inflation in the next 12 months, followed by macroeconomic volatility at 26%.
These concerns aren't just for this year, however, as 23% said they would still feel highly or extremely exposed to macroeconomic volatility, while 25% said the same for inflation.
"When the survey was carried out late last year, interest rates and inflation were rising and there was widespread talk of a recession. The results clearly illustrate how much of a concern these issues are for CEOs," Averill said in a media release.
These findings are expected to change further, according to Averill, as the survey was carried out before the Auckland Anniversary weekend flood and Cyclone Gabrielle.
"I expect the impact of these events will play out in the results for next year's survey," Averill said.
According to the CEO, the recent weather-related events will likely create "further challenges" in the economic outlook."
CEOs are also aware of the need to invest in technology to create long-term business transformation, revealed the report.
According to the study, 84% are investing in automating processes and systems in the next 12 months, while 76% are looking to deploy cloud and AI to workplaces.
"Investing in technology will play a vital role in helping organisations deal with some of the challenges they currently face and deliver long-term value," Averill said. "The pace of change only continues to increase so business leaders need to think about what interventions they can make now and into the future to remain successful."
While business leaders are looking at profitability in the face of immediate challenges, they cannot afford to lose sight of longer-term issues, Averill said.
"We must maintain momentum and think about how we can best transform our businesses to thrive and remain prosperous into the future,” he said. “This dual imperative is a complex balancing act for CEOs but one that we need to grapple with for organisations to remain viable in the years to come."
