Pandemic fatigue, economic factors, including the threat of rising interest rates, inflation, and an anticipated recession, and reputational risk, top the list of most pressing concerns for CEOs in India today.
As many as 66% CEOs in India, compared to 86% globally, anticipate a recession to hit, with 86% CEOs in India, compared to 71% CEOs globally, predicting it will impact company earnings by up to 10%, says the KPMG 2022 India CEO Outlook.
The survey, which asked more than 125 CEOs in India about their strategies and outlook, reveals that 58% of leaders in India as well as globally expect a recession to be mild and short.
Further 62% CEOs in India compared to 73% 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% CEOs in India compared to 73 % CEOs globally) than they did in February 2022 (40 % CEOs in India compared 60 % CEOs globally), when KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey.
Further, 57% CEOs in India are confident about the global economy's growth prospects over the next three years (up from 52 % in February 2022) and nearly 72% CEOs in India are confident about their organisation’s growth over the next three years.
“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 organisation’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,” said Yezdi Nagporewalla, CEO, KPMG in India.
“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.
Anticipated recession driving talent freezes
With continued economic turmoil, there are signs the Great Resignation could be cooling down, with 33 % CEOs in India, compared to 39% of CEOs globally, having already implemented a hiring freeze, and 47% CEOs in India, compared to 46% CEOs globally, considering downsizing their workforce over the next six months.
But taking a longer-term view, 79% CEOs in India and globally expect their organisation’s headcount to increase over the next three years, says the survey.
Uncertainty fueling long-term digital transformation
The current uncertainty is driving CEOs in India to continue to prioritise digital transformation with 61% CEOs in India, compared to 72 % CEOs globally, agreeing they have an aggressive digital investment strategy, intended to secure first-mover or fast-follower status.
The survey adds that in the longer-term, little less than a quarter (23%) CEOs in India believe that advancing digitalisation and business connectivity is also vital to achieving growth objectives over the next three years.
Then, 57% CEOs in India also agree that their organisation’s digital and ESG strategic investments are inextricably linked.
The anticipated recession may also be pushing businesses to reconsider their strategies.
As many as 50% CEOs in India, compared to 37% CEOs globally, plan to pause or reduce their digital transformation strategy in the next six months, while 28% CEOs in India, compared to 40% CEOs globally, have already paused or reduced their digital transformation strategies
Cybersecurity still a strategic function for CEOs
While other risks may now feature as top concerns for CEOs in India as well as globally, the survey notes that the cyber environment is evolving quickly, with 66% CEOs in India, compared to 77% globally, seeing information security as a strategic function and a potential competitive advantage.
As many as 70% CEOs in India, compared to 78 % CEOs globally, view cyber strategy as critical to engender trust with their key stakeholders.
Geopolitical uncertainty is increasing worries over corporate cyber-attacks for 73% CEOs globally, says the survey.
In comparison, only 54% CEOs in India view this as a concern. But that is not to say they are not taking precautions. In fact, 60% CEOs in India, compared to 76% CEOs, globally say that protecting their partner ecosystem and supply chain is just as important as building their own organisation’s cyber defences.