A majority of Canadian CEOs remain optimistic about their organizations’ growth over the next three years but are increasingly feeling the strain to deliver on environmental, social, and governance (ESG) commitments and boost productivity through new technologies, according to KPMG’s 2024 CEO Outlook.
The survey, which gathered insights from leaders of Canada’s largest companies, found that 76 per cent of CEOs expressed confidence in their organization’s three-year growth prospects, while 83 per cent felt similarly about the Canadian economy. However, 76 per cent also said they are under greater pressure to secure their company’s long-term prosperity.
Benjie Thomas, chief executive officer and senior partner at KPMG in Canada, noted that while it’s not surprising for CEOs to feel confident after navigating recent economic turbulence, the growing pressure on leaders is evident.
“Now they are aggressively looking for ways to improve their company’s productivity, optimize revenue, take advantage of new technologies like generative AI, and become cyber-proof, trade-proof, and inflation-proof,” Thomas said.
Small- and medium-sized business (SMB) leaders echoed this optimism, with 92 per cent reporting confidence in their growth prospects and 88 per cent in the Canadian economy. However, 86 per cent also acknowledged the mounting challenges of securing long-term success.
Top challenges: cybersecurity, operational risks, and economic uncertainty
Cybersecurity and operational risks remain key concerns for Canadian CEOs, with 59 per cent citing economic uncertainty as their biggest challenge. This mirrors the sentiment of global leaders, 53 per cent of whom also see economic uncertainty as a major hurdle.
SMB leaders placed a greater emphasis on emerging and disruptive technologies, with 31 per cent worried about protectionist attitudes and economic decoupling in certain markets.
The survey also highlighted concerns about environmental and climate risks. Nearly half of Canadian CEOs said executing their ESG strategies is a top operational priority, though only 50 per cent feel adequately prepared to handle potential scrutiny from stakeholders and regulators. In comparison, only 34 per cent of global CEOs felt similarly prepared.
For SMBs, ESG ranked lower on their priority list, with leaders more focused on implementing generative AI. Many smaller companies are playing catch-up after taking a “wait-and-see” approach to AI adoption. More than half of CEOs (59 per cent) now see generative AI as a top investment priority, though this represents a decline from last year’s 75 per cent.
| Confidence in three-year growth prospects | Canadian CEOs 2024 | Canadian CEOs 2023 | Canadian SMBs 2024 | Canadian SMBs 2023 | Global CEOs 2024 | Global CEOs 2023 |
|---|---|---|---|---|---|---|
| Own company | 76% | 80% | 92% | 88% | 76% | 77% |
| Domestic Economy | 83% | 89% | 88% | 85% | 78% | 78% |
| Global Economy | 69% | 69% | 84% | 81% | 72% | 73% |
Talent competition and the return to office
The challenge of attracting and retaining skilled workers continues to be a significant issue for Canadian CEOs. The survey found that 83 per cent of CEOs expect a full return to the office within the next three years, up sharply from 55 per cent in 2023. Furthermore, 90 per cent indicated they are likely to reward employees who return to the office with favourable assignments, pay raises, or promotions.
SMB leaders, however, are less convinced. Only 20 per cent foresee a full return to the office, with 65 per cent expecting hybrid work arrangements to be the norm over the next three years. Despite this, 85 per cent of SMBs said they would offer incentives to employees who return to the workplace.
The report also pointed to the growing importance of companies’ employee value proposition, with leaders evaluating how career development, work-life balance, compensation, and company culture can attract top talent. A majority of SMB leaders (84 per cent) expect their businesses to be impacted by shifts in the labour market, including retirements and a shortage of skilled workers, while only 28 per cent of CEOs share the same concerns.
Looking ahead
KPMG’s CEO Outlook provides insight into the strategies and challenges Canadian business leaders face as they navigate a complex and rapidly evolving economic landscape. From cybersecurity risks to talent shortages and the adoption of generative AI, the pressures on CEOs to deliver sustainable growth continue to intensify.
“Canadian business leaders are well aware that they will need to continuously improve their operations, decarbonize, and upskill their workforce to compete in a world that’s getting tougher by the day,” said Tim Prince, Canadian managing partner, clients and markets at KPMG in Canada.
The KPMG CEO Outlook surveyed 1,325 global CEOs, including Canadian leaders, between July and August 2024.
