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What keeps Canadian CEOs up at night? Economic uncertainty, skills shortage and climate change: Survey

Canadian CEOs are getting cold feet about the prospects of global economic growth, according to a new survey from PwC.

CEOs in Canada are more likely (63 per cent) than their global counteparts (53 per cent) to predict a decline in the rate of economic growth in 2020.  According to the CEO Survey, the top concern for Canadian CEOs include uncertain economic growth, policy uncertainty, availability of key skills and climate change.

Organic growth a focus, U.S. market not so much

Only 14 per cent of Canadian CEOs expect positive news on growth over the next 12 months.

Despite a subdued global economic outlook, 70 per cent of Canadian CEOs are still somewhat or very confident about their organizations’ potential for growth in the next year. Most will continue to focus on organic growth and operational efficiencies, rather than looking to international markets to unlock growth.

Only 44 per cent consider the United States a key market for their organizations’ growth prospects, down from 60 per cent in 2019 and 88 per cent in 2018.

“Canadian CEOs from St. John’s to Victoria are firmly focused on succeeding in times of uncertainty,” said Nicolas Marcoux, CEO and senior partner, PwC Canada. “Regardless of industry and geography, they’re largely grappling with the same themes as they look to uncover growth in a slow growth environment. These include the imperative to upskill their workforce, integrate environmental practices into their operations and safeguard their organizations from increased cyber security risks.”

Upskilling workforces to be future ready

The majority of Canadian CEOs (75 per cent) are concerned about the availability of key skills in their industry.

Attracting talent with the key skills of the future is challenging and more organizations are developing programs to upskill their talent from the inside. Canadian CEOs admit they’re lagging in establishing upskilling programs that take on a more holistic approach by developing the right mix of soft, technical and digital skills.

Some CEOs indicated that they see certain benefits to upskilling, such as improved culture and retention. Others, however, find it challenging to prove that their upskilling efforts have been effective at increasing workforce productivity, growing the business or fostering innovation.

This could be attributed to not having the right upskilling programs in place or not being able to properly measure their program’s effectiveness.

CEOs face climate-induced uncertainty

Navigating climate policy in Canada is becoming more pressing as investors and boards increasingly require environmental, social and governance (ESG) metrics. While the issue may have opposing views depending on the industry, Canadian CEOs are taking notice.

More than half (62 per cent) are concerned about climate change and environmental damage as threats to their growth.

The report indicates  there’s growing awareness around the benefits of climate action, not only in terms of investment and reputation, but in the development of new products and services. They see the opportunity to develop environmentally sustainable products and processes (for example, reducing packaging, improving manufacturing processes, etc.).

Increasing complexity of cyber threats

Cybersecurity is also top concern for Canadian CEOs. They are seeing a shift in what it takes to protect their organizations and security, financial crime, safety, reliability, privacy and data ethics become increasingly complex and intertwined.

The majority (90 per cent) say the increasing complexity of threats is having the greatest impact in shaping their cybersecurity strategy, compared to 75 per cent last year.

“Canada’s digital economy is thriving and with this comes the need for Canadian businesses to balance cyber risk with their digital transformation journey,” said Marcoux.

“Public and private sector collaboration is essential to ensure that cyber and data privacy laws are sound and developed with the best interests of Canadians in mind.”

Only a quarter of Canadian CEOs, however, say that governments are designing privacy regulations that actually increase consumer trust and that governments and businesses are effectively collaborating to harmonize cybersecurity strategies.