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People Strategy

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RAISS
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18th Annual Global CEO survey

Familiar problems – and new opportunitiesp7 / The skills dilemmap11 / A new take on talentp12 / Managing
talent in a digital worldp15 / Priorities for CEOs and HRp17

People strategy for the digital age


A new take on talent
81%
of CEOs are looking for a much
broader range of skills when
hiring than in the past.

73%
of CEOs said availability of
skills was a serious concern,
an increase of 10% on 2014.

www.pwc.com/people
PwC’s Global People and Organisation practice brings
together an unmatched combination of 10,000 people
with industry, business, talent, strategy, HR, analytics
and technology expertise in one team across 138 countries
Together, we build tailored people and organisation
solutions with a deep understanding of our clients’
uniqueness and grounded in rigorous analysis and data-
driven insight, to create lasting, differentiated value.

We help clients to implement organisational transformation,


improve the effectiveness of their workforce, develop and
move talent around their business, and manage their human
capital risks. We work from people strategy through to
organisational execution.
PwC 18th Annual Global CEO Survey 1

Just as the industrial revolution did One of the biggest headaches for CEOs is

Introduction a century and a half ago, the digital


revolution is reshaping the way we live
our lives and the way we work; it’s also
making sure that the organisation has the
right people to cope with what lies ahead.
There’s the basic question of planning for
“Today’s new dynamic
environment requires
original decisions that
forcing a fundamental transformation of the skills that are needed now and in the have never been
business – changing the relationship with future: Which roles will be automated? made before.”
customers, bringing new entrants and What new roles will be needed to manage Alexey Repik
their disruptive technologies, driving new and run emerging technology? What skills Chairman of the Board, R-Pharm,
channels, products and services, breaking should the company be looking for, and Russia
down the walls between industries and, in training their people for? Where will we
many cases, forcing a basic rethink of the find the people we need?
business model.
But more importantly, CEOs need to be sure
The speed of change makes it almost that the business is fit to react quickly to
impossible to predict the future with any whatever the future may throw at it – and
degree of certainty. In such a climate, that means filling it with adaptable, creative
organisations need a credible and forward- people, working in a culture where energy
looking leader; a role that has never been fizzes and ideas spark into life. If they can’t
more critical. CEOs need to understand be found, they must be created.
how technology can improve their business
and the customer experience, and plan for Whatever technological innovations are
things that seem a distant dream. Denise ahead, it’s the people that will make the
Ramos, CEO of ITT Corporation, puts it like difference between eventual success and
this: “You have to create multiple futures failure. That’s why CEOs need a people
and multiple options for your company, strategy for the digital age.
because you don’t know when the world’s
going to look like three to five years
from now.”
People strategy for the digital age

A volatile, unpredictable world Skills at crisis point


Main CEOs are standing on constantly shifting ground. They see
before them a boiling mix of opportunities and threats,
The skills shortage has become a crisis-level priority
for CEOs; 73% name it as a threat to their business,

findings driven by technology that’s mining new markets but which


is also transforming everything around them, from how
compared with 46% just six years ago. The digital age
has transformed a nagging worry into something far
their customers behave to what their people expect from more challenging; 81% of CEOs say they’re looking for a
work. They’re reacting by exploring new business models, wider mix of skills than they have in the past. Businesses
sectors and unexpected partnerships – in a bid to adapt desperately need hi-tech innovators and ‘hybrid’ workers
quickly, find growth, but increasingly to access the skills who understand not only their own sector, but complex
they need. digital technology as well.

73%
of CEOs said availability
81%
are looking for a much
78%
say they always use
71%
actively search for talent
of skills was a concern, an broader range of skills multiple channels to find in different geographies,
increase of 10% on 2014. when hiring than in talent, including online industries, or
the past. and social. demographic segments.
PwC 18th Annual Global CEO Survey 3

A new take on talent Using data wisely Great leadership required


Success in the digital world demands new ways of thinking, There’s still some way to go before organisations make Competitive advantage in the digital age lies not in
especially when it comes to talent. Workers with the most the best possible use of the people data they collect. Under securing the best technology, but in using and managing
in-demand skills are creating a ‘gig economy’, where they’re half of organisations consistently use analytics to provide talent well – and that demands truly great leadership. But
in control of where and when they work. Organisations, insight into how effectively skills are being deployed. CEOs this is leadership in a radically transparent world, where
in turn, are rethinking their talent mix and exploring the are fully focused on the role digital technology plays in organisations are far more complex, where ideas are a
potential of automation; and CEOs have woken up to the engaging customers; so why are they ignoring its value commodity, and where talent is mobile and autonomous.
value of diversity – of thinking and experience – to create when it comes to engaging employees? Leaders must create a culture where innovation thrives,
value in the digital age. ideas spark into life and people – whoever and wherever
they are – are bound together in a common cause.

33%
have greatly increased
81%
always equip employees
60%
say creating a skilled and
75%
believe hiring and
58%
say that digital
85%
of CEOs who had a
their use of contingent with new skills through adaptable workforce training strategies to technologies deliver value diversity and
workers, part-time continuous learning or should be a top priority integrate digital in sourcing, developing inclusiveness strategy
employees, outsourcing mobility programmes. for government – up 19% throughout the enterprise and retaining talent. told us that this had
and service agreements. on last year. are important. helped to improve
business performance.
People strategy for the digital age

Our 18th Annual Global CEO Survey finds Figure 1: CEOs see more opportunities and

Familiar that the pace of technological, political and


economic change has left CEOs standing on
more risks today than three years ago
Q: How much do you agree/disagree that there are
“There’s no way you can
predict all the changes

problems
constantly shifting ground; while 61% feel more growth opportunities/threats for your company that will happen 12
than there were three years ago?
that there are more growth opportunities months from now or
for their company than there were three three years from now.
– and new years ago, 59% feel that there
are more threats.
Your organisation has
to be ready to react to

opportunities 31% any change.”


The list of worries for CEOs is long, see only more Victor Kislyi,

61%
spanning everything from overregulation opportunities Executive Chairman and CEO,
to the threat of a pandemic, but it’s the risk Wargaming Public Company Limited,
Cyprus
that they’ll fail to find the skills and talent
they need to succeed in this new world
30% see more
opportunities

73%
see both more
that’s fast rising to the top of their list. opportunities
and more threats
CEOs are forging ahead in a world that they
find more volatile and unpredictable. The 59% of CEOs say the
theme is one of change, led by disruptive
innovation and the associated shift in
29% see more
threats
availability of key
skills is a concern
see only
customer preferences, which are driving more threats
fundamental changes to business. CEOs
need to be prepared for anything.
PwC 18th Annual Global CEO Survey 5

Dealing with digital disruption A central priority for CEOs is the need for So far, CEOs have focused on using
The impact of digital technologies is a ‘digital strategy’ to make sure that their digital technology as a way of enhancing
preoccupying CEOs in every region and organisations take full advantage of the efficiency, cutting costs and improving the
sector. The pace of change is so fast and opportunities ahead. But what, exactly, do customer experience. Their willingness to
the possibilities so far-reaching that there’s they mean by a digital strategy? embrace more radical technology – most
little consensus on where we may end up. notably robotics and other automation – is
We’ve already seen a ‘smart’ building that beginning to alter the business landscape.
responds to implanted microchips in its
inhabitants,1 and Japanese engineers are
close to completing artificial intelligence
(AI) software that can pass a university
entrance exam.2 What’s next?

Figure 2: CEOs see opportunities in a wide range of digital innovations


Q: How strategically important are the following categories of digital technologies for your organisation?

Mobile technologies for customer engagement 3% 8% 31% 50% 85%


83%
Data mining and analysis 3% 5% 32% 48% 82%
Cybersecurity 3% 7% 25% 53% 76%
76%
Internet of Things 5% 9% 34% 31%
75%
Socially enabled business processes 7% 13% 36% 25% 74%
74%
Cloud computing 4% 13% 33% 27%
73%
Battery and power technologies 13% 17% 25% 22% 73%
71%
Robotics 18% 23% 23% 13%
71%
Wearable computing 18% 21% 21% 12% 70%
3D printing 24% 24% 20% 7% 69%
69%
68%
Key Not important at all Not very important Somewhat important Very important
68%
65%
65%
1
http://www.bbc.co.uk/news/technology-31042477 64%
2
The Todai Robot Project, see http://www.nii.ac.jp/userdata/results/pr_data/NII_Today/60_en/p2-3.pdf 64%
58%
56%
People strategy for the digital age

Planning for automation Perhaps the biggest challenge, though, is Irrespective of the investment in
The trend towards increased automation understanding the role that people will play automation, though, the real benefits come
“Any company, to survive
in the workplace has far-reaching in an automated world. It’s inevitable that from collaboration between people and
in the current
implications for talent management, some tasks that were previously carried out technology, rather than from one replacing
environment and into
from the strategic decision of which by people will be replaced by automation. the other.
the future, has to be on
roles can and should be automated to Robots are already replacing many manual
the forefront of
understanding the consequences for risk roles, but more sophisticated technology
technology. We’re using
management, performance measurement and the advent of advanced algorithms
robotics in our plants to
and employee engagement. and artificial intelligence advances are
be more productive,
fast bringing the potential to replace
effective and efficient,
knowledge-based, decision-making roles
and to operate our
as well. But equally, some tasks could only
plants even more safely.”
ever be carried out by software and were
Alan D Wilson
never the domain of humans.
Chairman, President and CEO,
McCormick & Company, US

51%
will make a strategic
alliance or joint venture
over the next 12 months.

55%
are planning a domestic
or cross-border M&A
over the coming year.

33%
say they have already
entered a new industry.
PwC 18th Annual Global CEO Survey 7

Blurred lines At the same time, the traditional

33%
CEOs are reacting to the heady mix of boundaries set around work are also “In every area of business today,
threats and opportunities by expanding disappearing. Global and virtual working partnering and working with other
their options and stepping outside continues to alter our understanding of parties is critical for progress. To avoid
established borders, exploring new how and where work is carried out, but the not-invented-here syndrome, to said they had greatly
business models and collaboration with now a newer development has added to embrace different ideas, to benchmark increased their use of
new partners. Many plan to move their the mix – the rise of ‘workers on demand’. themselves to each other, and to contingent workers, part-time
organisation into new industries, countries 33% of CEOs said they had greatly improve processes and systems is employees, outsourcing and
and markets, and they’re not restricting increased their use of contingent workers, critical to the ability of a company to service agreements.
themselves to what they already know. In part-time employees, outsourcing and rejuvenate itself and create a

26%
their bid to access new customers and new service agreements. In other words, competitive advantage. We work
technologies, diversification is the name ‘talent’ no longer means ‘employees’ – and together with partners to improve
of the game. This has its own implications that has far-reaching consequences for every single capability that we have.”
for talent; new business models and people management. Joaquin Duato say access to talent is a top
sectors mean that new skills (and most Worldwide Chairman, Pharmaceuticals, Johnson &
reason for collaborating with
significantly, combinations of skills) and Johnson, US
other organisations.
ways of working must be found.

56%
Figure 3: Technology and healthcare are the two top industries targeted by companies from other sectors
Q: Which industries has your organisation entered within the past three years or considered entering?

think organisations will


increasingly compete
in new sectors other than their
own over the next three years.

15% 15% 14% 13% 11% 11% 10% 10% 9% 9% 7% 5% 4% 3% 2%


Technology Healthcare, Professional Energy, Manufacturing Financial Retail and Transport Comm- Manufacturing Agriculture, Hospitality Construction Government Manufacturing
Pharma and and Utilities and – Industrial Services Wholesale and Logistics unications, – Consumer Forestry, and Leisure and Public – Automotive
Life Sciences Business Mining products (including Distribution Entertainment products Fishing and Services
Services Real Estate) and Media Hunting
People strategy for the digital age

The fact that CEOs worry about where they CEOs need people but are increasingly

The skills will find the talent and skills they need isn’t
new; but over the past three years the issue
worried about where, and even whether,
they’ll find the types of talented people

dilemma
has developed from a nagging worry to a they need.
crisis-level priority.
The availability of skills is now the second
50% said they expect to increase headcount biggest concern for business leaders, cited
this year and just one in five expect to by 73% of all CEOs and rising to 84% in the
cut back on staff. CEOs based in the UK, 90% in China and 93% in South Africa
fastest-growing regions and countries and Japan.
were far more likely to have plans to
increase headcount: 67% of those in the
ASEAN region, 70% in Mexico and 73%
in India said they planned to expand
their workforce.

Figure 4: Half of global CEOs are hiring, but they are increasingly worried about getting the skills they need
Q: Do you expect headcount at your company to increase, decrease or stay the same over the next 12 months?
Q: How concerned are you about the following potential economic, policy, social and business threats to your organisation’s growth prospects?
(Availability of key skills was one of the threats CEOs named.)

73%
Worried
about key
63% skills
61%
58%
56%
53%
51%
46% Planning
51% 51% 50% 50% to increase
headcount
45%

39%
37%

2008 2009 2010 2011 2012 2013 2014 2015


PwC 18th Annual Global CEO Survey 9

50%
Figure 5: CEOs are worried about finding the skills they need – but not all to the same extent
Q: How concerned are you about the following potential economic, policy, social and business threats to your organisation’s growth prospects? (Availability of key skills
was one of the threats CEOs named.)

said they plan to


93% Japan 85% Metals increase headcount
93% South Africa 83% Technology this year.
90% China 82% Healthcare
85% Hong Kong 76% Automotive
“To be able to attract
84% Romania 76% Forest, Paper and Packaging
people with multiple
84% UK 75% Business Services talents is an absolute key
79% Argentina 74% Industrial Manufacturing in the whole digital
78% ASEAN 74% Transport and Logistics
economy, and is also
probably our largest
78% US 73% Global
single headache. We need
78% Russia 73% Entertainment and Media multi-talented people
77% CEE 71% Banking and Capital Markets who not only understand
76% Middle East 71% Insurance
one piece of technology
or one piece of
74% Australia 70% Power and Utilities
commercialisation but
73% Global 69% Engineering and Construction rather the whole chain.”
70% India 69% Consumer Pekka Lundmark
President and CEO, Konecranes Plc,
68% Brazil 68% Chemicals
Finland
67% Switzerland 68% Asset Management
63% Denmark 65% Communications
62% Nordics 65% Hospitality and Leisure
61% Mexico 64% Pharma and Life Sciences
61% Canada 64% Energy
54% Germany 58% Retail
53% Spain 56% Mining
49% Italy

37% France
People strategy for the digital age

Organisations are committing a lot of energy One reason is that the blurred lines

81% 78%
to the search for talent and to find the people between sectors and the willingness of
they need. They are searching in many organisations to collaborate with partners
more places: 78% of CEOs say their business outside of their comfort zone, particularly
always uses multiple channels to recruit, hi-tech innovators, is creating a need
said they are said their
while 71% say they actively search for talent for ‘hybrid’ workers who understand not
looking for a much business always
in different geographies, industries and only their own sector, but complex digital
broader range of skills when uses multiple channels
demographic segments. But why is finding technology as well.
hiring than they have in to recruit.
the right people proving so difficult?
the past.

Figure 6: Eight in 10 CEOs equip employees with new skills through continuous learning and look for a much broader range of skills than in the past
Q: To what extent do you agree or disagree with the following statements about your organisation’s talent activities?

50% We always equip employees with new skills through continuous


4% 56% 25%
learning programmes
48%
We look for a much broader range of skills when hiring than
1% 5% 58% 23%
we did in the past
We always use multiple channels to find talent, including online
1% 7% 52% 26%
platforms and social networks
25% We actively search for talent in different geographies, industries
2% 9% 48% 23%
and/or demographic segments
27%
We always use data analytics to provide better insight into how
3% 19% 38% 8%
effectively skills are being deployed within our organisation
We always collaborate with a wide range of external organisations to
4% 25% 32% 8%
fulfil talent needs, including sharing of talent with other organisations
We have greatly increased our reliance on contractors, part-time
9% 28% 26% 7% 14%
workers, outsourced functions or service agreements

Key Disagree strongly Disagree Agree Agree strongly 9% 14% 67% 10%

17% 66% 13%

17% 64% 13%

10% 63% 10%

18% 62% 11% Agree

18% 62% 11%


26%
57% 10%
PwC 18th Annual Global CEO Survey 11

81% of CEOs confirm that they are CEOs know they need to concentrate on

71%
looking for a much broader range of skills their organisation’s ability to learn, adapt
when hiring than they have in the past. and innovate. Really understanding the
Unsurprisingly, tech skills are in high type of skills that they’ll need, the type of
demand, with three-quarters of business people they’ll need, and the channels they’ll
say they
leaders believing that specific hiring and use to find them, create a set of complex
actively search
training strategies to integrate digital challenges.
for talent in different
technologies throughout the organisation
geographies, industries or
are essential for success in the digital age.
demographic segments.
People strategy for the digital age

Digital technology is taking over the Creating an adaptable workforce

A new take workplace and we’re seeing entire sectors


digitizing their business models, but that
Economies and organisations survive by
continually responding to the world around
“We are actively finding
ways of rotating people

on talent
hasn’t made people less important; it’s them. In our work with LinkedIn,3 we between Asian countries
made having the right people absolutely examined the role played by adaptability, or and the Nordic market.
essential. That doesn’t just mean people the human element of a flexible workforce. We are highly mindful
with digital skills – although clearly that’s This is the ability of employers to think that it is very
important – but a collection of people who more widely about sources of talent, important, also for
think innovatively, can adapt instantly, exploring not only new geographies and the development of the
who give the company a competitive edge. sectors, but investing in their current company, that we have
It also means managing people well and as employees and encouraging them to such cultural diversity
technology develops, creating the right mix try new things – and the willingness of and rotation taking
of automation and human creativity. employees to embrace change and apply place. In that sense
their skills somewhere new. the value of diversity
The organisations that have hit the heights somewhat overrides
of success in the digital world aren’t We believe that an adaptable workforce the additional cost.”
those that have determinedly followed is essential in the digital world as a Kimmo Alkio
the old models and ways of thinking; it’s way of addressing the skills gap and by President and CEO, Tieto, Finland
those that have forged a new path. These creating a better match between employer
organisations have a people strategy that and employee.
delivers vital skill sets, new mindsets,
and better collaboration – across lines
of business and geographies – all in a
much more transparent and data driven
81% of CEOs say that their business is
constantly looking to equip employees with
new skills through continuous learning or
81%
of CEOs say
environment. They embrace tech-savvy mobility programmes, although there are that their business
strategy, create a culture where innovation some geographical variations: only 61% is constantly looking to equip
thrives, understand the value of true of CEOs in Japan agreed, compared with employees with new skills
diversity in conceiving new ideas, and 86% in Africa and 87% in the Middle East. through continuous learning
rethink their investment in people. Business leaders need to go one step further or mobility programmes.
and encourage a wide range of abilities and
What companies need isn’t just a digital experiences, and create workers who are
strategy; it’s a people strategy for the willing and able to apply their skills to new
digital age. opportunities as they arise.

3
Adapt to survive, see http://www.pwc.com/gx/en/hr-management-services/publications/talent-adaptability/index.jhtml
PwC 18th Annual Global CEO Survey 13

Talent on tap The diversity dividend Figure 7: Gender and knowledge, skills and experience are the most common
This year’s survey shows clearly how the In recent years the skills shortage in many dimensions addressed in CEOs’ diversity and inclusiveness strategies
organisation of labour is changing as countries has encouraged organisations to mine Q: Which dimensions of talent diversity and inclusiveness do you specifically address, or
businesses seek to become more responsive for talent in previously underused demographic plan to address in your company’s talent strategy?
and agile, shedding and gaining workers groups or cross-border talent, but CEOs are now
as they need them. A third of CEOs recognising that the benefits to diversity go far
say they have greatly increased their beyond talent supply.
reliance on contractors, part-time workers
and outsource arrangements. This is The ‘traditional’ understanding of workplace
particularly the case in Africa (49%), where diversity as meaning gender, age and ethnic 33%
CEOs say that the skills shortage is acute. diversity has moved on. In the fast-paced Gender
digital world, innovative thinking drives
0.8%
Adaptability
These contingent workers are often highly competitive advantage and CEOs know that
skilled or motivated and, as a result, central they must create an environment where 32.4%
to the success of the organisation. They innovation can thrive. The fire of innovation, Knowledge,
skills and
are driving a ‘gig economy’, where those adaptability and creativity is fuelled by 1.2% experience
with the most in-demand skills can dictate diversity, when people with a wide range of Religion/
where and when they work, and who they perspectives work together; not just people creed
work for. Organisations must compete for of different ages and gender, but people who
their attention, but also manage them as are different across every dimension – with
carefully and strategically as full-time different backgrounds, physical characteristics, 24.5%
employees; the ‘workforce’ no longer life experiences and personalities. Ethnicity/
nationality/
means only direct employees and this race
has wide-ranging implications for talent 4.7%
management. For instance, how should Personal
quality/
the performance of contingent workers be mindsets
measured? And rewarded?

7.2% 8.2%
Disability Attitude to
career/pro-
8% gression
Age
People strategy for the digital age

CEOs are embracing the need for diverse But there’s still a lot of work to be
“If you look at the “We want people in the thinking, but are still struggling to find the done. Three in ten CEOs say that their
connection between company that have best way to attract and keep the range of organisation doesn’t have a strategy to
diversity and the differing ideas, differing perspectives they’re looking for. Formal promote diversity and inclusiveness,
bottom line, it’s quite experiences, differing strategies can help to broaden the mix of although 13% said they had plans to
obvious that if you have opinions, because we talent; 90% of CEOs who had a diversity adopt one. There were wide geographical
a diverse team, if you need to solve our strategy told us that this had helped them differences: just 23% of CEOs in Hong
really reflect the customers’ problems. attract talent and 85% said it had helped Kong and 32% of those in Romania had
markets and the world The only way you do that to improve business performance. They a diversity strategy, compared with 86%
you are actually a part in a world class way is to also saw it as benefiting innovation, in Australia.
of, then you will be bring a variety of people collaboration, customer satisfaction and
much better positioned together and use their their ability to harness new technologies
to capture new trends.” collective know how. – all essential ingredients for success in
Olof Persson Diversity and inclusion today’s world.
President and CEO, will make us that much
The Volvo Group, Sweden more competitive in the
marketplace.”
Denise Ramos
Chief Executive Officer and President,
ITT Corporation, US

90% 85%
of CEOs who said their
had a diversity diversity strategy
strategy told us that this had helped them improve
helped them attract talent. business performance.
PwC 18th Annual Global CEO Survey 15

Figure 8: CEOs’ commitment to a formal diversity policy varies dramatically


Q: Does your organisation have a strategy to promote talent diversity and inclusiveness or have plans to adopt one?

50% Australia 7% 2% 86% 5% Insurance 5% 15% 74% 6%

48% Denmark 3% 8% 83% 8% Communications 6% 12% 73% 10%

India 1% 8% 82% 8% Pharma and Life Sciences 8% 16% 64% 12%

Brazil 2% 9% 75% 14% Global 7% 17% 64% 13%

25% France 3% 6% 74% 17% Banking and Capital Markets 6% 17% 63% 15%

27% US 4% 16% 74% 7% Technology 4% 20% 63% 13%

Germany 9% 7% 70% 14% Power and Utilities 4% 22% 63% 11%

Switzerland 10% 14% 67% 10% Business Services 9% 20% 62% 10%

Mexico 5% 17% 66% 13% Engineering and Construction


12% 3% 22% 61% 14%

Global 7% 17% 64% 13% Automotive 11% 18% 60% 12%

South Africa 17% 10% 63% 10% Mining 8% 24% 60% 8%

Spain 6% 18% 62% 11% Industrial Manf. 5% 18% 58% 18%

Italy 9% 18% 62% 11% Chemicals 14% 13% 57% 17%

UK 7% 26% 57% 10% Consumer 7% 19% 56% 18%

ASEAN 8% 20% 55% 17% Energy including Oil and Gas 10% 24% 56% 11%

Nordics 2% 30% 54% 14% Transport and Logistics 6% 23% 55% 16%

Japan 25% 53% 22% Healthcare 10% 21% 54% 15%

Middle East 13% 18% 53% 16% Entertainment and Media 6% 21% 53% 20%

Argentina 14% 24% 50% 12% Hospitality and Leisure 22% 27% 53% 6%

China 20% 19% 50% 11% Retail 9% 22% 52% 17%

Russia 18% 21% 48% 14% Forest, Paper and Packaging 10% 25% 51% 14%

Romania 22% 27% 32% 19% Asset Management 11% 26% 47% 16%

Hong Kong 49% 23% 28% Metals 5% 44% 41% 10%

Key Don’t know/refused No, we don’t have a strategy nor do we plan to adopt one Yes, we have such a strategy No, we don’t have such a strategy –Œbut we plan to adopt one

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People strategy for the digital age

Building skills from the bottom up

22%
As their fears about finding the right talent
in the future increase, CEOs are investing
more effort into creating skills in the next
generation of workers and recognise that
felt that their own
this needs to be a collaborative effort. 60%
government had been
(a 19 percentage point increase on last year)
effective in collaborating
felt that creating a skilled and adaptable
to create a skilled and
workforce should be in their government’s
adaptable workforce.
top three priorities, but only 22% felt that
their own government had been effective in
this area. CEOs based in Latin America and
Africa are particularly disillusioned, with
65% and 80%, respectively, saying that
their government had been ineffective in
creating a skilled workforce.

Overall, 44% of CEOs say that their


organisation will work with governments to
develop a skilled and adaptable workforce
over the next three years.
PwC 18th Annual Global CEO Survey 17

In practice, though, collaboration between


business and government is patchy. CEOs “Great products and
in Denmark (70%), France (74%), Brazil solutions come when
(68%) and India (66%) were more likely to there is a synthesis of lots
work with government, often an indication of different kinds of
of a specific state programme. In Denmark,4 perspectives, and when
for example, the newly elected coalition we are diverse we create
government announced in 2012 a number the opportunity for that
of initiatives aimed at tackling rising rich synthesis of great
unemployment among the 25-to 30-year- perspectives. The more
old age group, which included a state- diverse we are, the better
funded adult apprenticeship programme we will all be. This is
and in-company vocational training. more than something
that you pay lip service
to; this is one of the
fundamental priorities
for us at Infosys.”
Dr Vishal Sikka
Chief Executive Officer and
Managing Director, Infosys, India

http://www.cedefop.europa.eu/en/news-and-press/news/denmark-government-combat-youth-unemployment-education
4
People strategy for the digital age

By the numbers: Data analytics CEOs are fully focused on the role digital

Managing One thing we’re not suffering from in


the digital world is a lack of data – it’s
technology plays in engaging customers; so
why are they ignoring its value when it comes
“The data is great, but
how you use it as

talent in a
everywhere. to engaging employees? The abundance leaders is the most
of information – from both internal and important thing.”
Four out of five (80%) CEOs told us that external sources – is the richest possible
digital world
Dr. Marc Harrison
the use of data analytics was critical to mine when it comes to understanding the Chief Executive Officer, Cleveland
a successful digital strategy. The use of employer brand, employee engagement Clinic Abu Dhabi, UAE
analytics, though, seems to be focused on and what employees want and need from
external stakeholders and is yet to be used the organisation. The vital, and apparently
to its full effect when it comes to talent missing, step is to transform the data “We’ve been much more
management. Under half of CEOs (46%) collected into strategic advantage. proactive in identifying
told us that their organisation always capabilities and skills
uses analytics to provide insight into how that we think our top
effectively skills are being deployed. Just leaders will need to
58% felt that digital investment had created compete in the new
value for their organisation in terms of talent world. We spend an
strategy by helping them to find, develop and enormous amount of
retain talent. time as a team talking
about people’s skill sets,
Figure 9: CEOs are failing to gain full value from people analytics how they have to evolve
and what are the best
roles for them to take
on. And we tap people
80% on the shoulder and say,
it’s time to move on.”
of CEOs see data
analytics as strategically David I McKay
important to their President and Chief Executive
business... Officer of RBC, Canada

46%
...but only 46% of
CEOs use data
analytics to provide
insight into how
effectively skills are
deployed in their
organisation
PwC 18th Annual Global CEO Survey 19

Getting leadership right How will these leaders be made? We’d


Leaders are presiding over organisations that argue that wide experience – a measure
are becoming more complex: where cross- of adaptable leaders – is becoming more
border and cross-sector collaboration is the important than ever. Of the CEOs questioned
norm, where workers are mobile, working at for the survey, 29% have no experience in
home or self-employed on a short contract, any sector beyond their own. Given the trend
where ideas are a commodity and innovation towards cross-sector collaboration and tech-
the competitive differential. They’re also based alliances, it’s more important than
operating in a radically transparent world ever that business leaders understand the
where very little is secret. Driving forward possibilities of technology.
an organisation that, on paper, seems one
step away from anarchy, depends entirely Reinventing HR?
on the skills and energy of its leaders and While organisations are adapting quickly
on a culture that binds people together and to the changing world, it’s essential that
motivates them in a common cause. HR matches the pace. Previous surveys
have indicated that CEOs don’t always
The digital world requires a different form of have confidence that their HR function is
leadership and management. The winning well-equipped to handle the challenges of
leadership capabilities of the future will competing for talent.5
include some of the traditional leadership
traits of vision, courage and humility, but While many improvements have been
increasingly an ability to drive a sense made, there’s a risk that too many HR
of purpose, build trust with internal and functions are overwhelmed by the scale
external stakeholders, adapt to change at of changes needed to address a highly
warp speed, anticipate fierce competitors, competitive talent market, a shifting talent
and deal with significant and evolving risks. model where employees and contract
workers sit side by side, and a workforce
We have consistently said that the digital that expects the same level of individuality
world demands extraordinary leadership. that they receive as consumers.
Organisations need to be sure that they can
create a solid pipeline of future leaders, who The old systems and HR approaches no
are well-prepared to take on the challenges longer apply; a creative reinvention of the
of the digital age with the skills to manage a role of HR is long overdue.
complex organisation.

5
Our 17th Annual Global CEO Survey, for example, found that only 34% of CEOs felt their HR function was equipped
to cope with transformational change
People strategy for the digital age

Priorities
for CEOs
and HR
PwC 18th Annual Global CEO Survey 21

Rethinking people strategy Adapt to changing demand Know, and value, your people
As business strategies undergo In the current climate, some of the most It’s easy to lose sight of the value of people
a fundamental re-think, so must critical strategic decisions to be made will in a digital world. The real winners won’t
organisations’ people strategies. be around people and skills. What are the necessarily be the organisations that secure
A wholesale re-design of work is now capabilities you need to compete? Can the best and latest technology; it’ll be those
required to deal with the opportunities those skills be hired, or existing employees that use the technology they have to get the
and threats of new technology and digital trained? What needs to be automated? best out of their people – and vice versa.
business models, to meet regulatory Or outsourced? And would a partnership And that means using talent data wisely.
requirements or cost targets. bring you the talent you need? Training We have access to more data than ever,
and development is absolutely essential but information means nothing unless it’s
Find the right leaders in a market where demand changes so intelligently analysed and the results fed
Leaders need to be able to create a culture rapidly. The development of analytical and into talent strategy.
that encourages and rewards innovation digital skills is paramount, but so too is
and sets ideas free. But there are also encouraging adaptability throughout the Create value through HR
new leadership skills to master – the organisation. You don’t necessarily know CEOs can’t and shouldn’t be expected to
ability to understand and guide complex which skills you’ll need in the future, so do all this alone. A strong and dynamic HR
organisations that straddle geographic and creating a flexible workforce willing to function, fit for the digital age, is required
sector boundaries, and the ability to build adapt to new challenges is essential. to deal with the almost overwhelming
and maintain trust in a world where very challenges presented by the radical
little is hidden. Organisations must not only Embrace diversity disruption sweeping through entire
find great leaders for today, but encourage Success in an increasingly digital world industries. CEOs, in turn, need to value
a pipeline of adaptable leaders for the demands a wider range of skills, a broader the best that HR can bring and empower
unknown challenges that will come. talent pool and new ways of thinking. It’s HR leaders to evolve the function to match
important for CEOs and their HR teams to today’s – and tomorrow’s – business needs.
take a more active role in seeking out fresh
sources of talent, encouraging divergent
thinking and broadening the criteria for
succession planning. There will always
be an element of ‘doing the right thing’
around diversity – and that shouldn’t be
undervalued – but CEOs increasingly see
improved business performance from their
diversity programmes.
Conclusion
PwC 18th Annual Global CEO Survey 23

Digital innovation has changed Workforce planning and


the rules around talent and talent management have become highly
management. CEOs are fully aware strategic; the skills needed are
of the complex challenges they constantly evolving, talent supply
face in the digital age and correctly is erratic and contingent workers
identify that talent will be one of are becoming a critical resource.
the biggest differentiating factors CEOs need an HR function
for their organisation’s success. that’s at the top of its game –
innovative, analytical, predictive
But the talent needed for the and supportive.
digital age – adaptable, flexible
people with compound skills and This is a time for bold decisions;
a willingness not just to embrace a ‘business as usual’ people strategy
change, but to drive it forward – won’t serve any organisation well.
is far more complex than before We’ve already seen that those
and this is placing even greater leading the way in the digital world
responsibility on organisations are companies that are rewriting
to create the talent they need. the rulebook, nowhere more so
Ironically, as the workplace than in the way they find, manage,
becomes increasingly digital, organise and reward their people.
people matter more than ever.
People strategy for the digital age

In total, we conducted 1,322 interviews In addition, 33 CEOs sat down with us

About the
survey
with CEOs in 77 countries between
September and December 2014. By region,
459 interviews were conducted in Asia-
Pacific, 330 in Western Europe, 147 in
near the end of 2014 for more extensive
conversations. Their thoughts are reflected
in the quotes throughout our report. The
interviews were spread across a range of
1,322
interviews completed across
North America, 167 in Latin America, industries.

77
125 in Central & Eastern Europe and
94 in Africa and the Middle East, in line More details about our survey methodology
with GDP. and findings by region and industry can be countries
found at www.pwc.com/ceosurvey

Western Central
North Europe & Eastern
America 330 interviews Europe
(25%) 125 interviews
147 interviews
(11%) (9%)

Middle
East and
Africa Asia-
94 interviews Pacific
Latin (7%)
459 interviews
America (35%)
167 interviews
(13%)
PwC 18th Annual Global CEO Survey 25

Jon Andrews North America Central & Eastern Europe Australia

Contacts Joint Global Leader,


People and Organisation
+44 20 7804 9000
Jeffrey W. Hesse
+1 312 298 6881
[email protected]
Alla Romanchuk
+7 (495) 232 5623
[email protected]
Jon Williams
+61 (2) 8266 2402
[email protected]
[email protected]
Scott Olsen Middle East South and Central America
Jon Williams +1 646 471 0651 David Suarez Joao Lins
Joint Global Leader, [email protected] +971 4304 3981 +55 11 3674 3536
People and Organisation [email protected] [email protected]
+61 (2) 8266 2402 Bhushan Sethi
[email protected] +1 646 471 2377 China/Hong Kong Africa
[email protected] Mandy Kwok Gerald Seegers
Justine Brown +852 2289 3900 +27 (11) 797 4560
Head of Marketing, Western Europe [email protected] [email protected]
Global People and Organisation Jon Andrews
+44 113 289 4423 +44 20 7804 9000 Roger Ng
[email protected] [email protected] +86 (10) 6533 7018
[email protected]
Joan Daura Cros
+34 932 532 758 Singapore
[email protected] Alywin Teh
+65 62367268
Peter De Bley [email protected]
+32 2 7104321
[email protected] India
Padmaja Alaganandan
Charles Donkor +91 80 4079 4001
+41 58 792 4554 [email protected]
[email protected]

Till Lohman
+49 40 6378-8835
[email protected]
www.pwc.com/people
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