People Strategy
People Strategy
Familiar problems – and new opportunitiesp7 / The skills dilemmap11 / A new take on talentp12 / Managing
talent in a digital worldp15 / Priorities for CEOs and HRp17
73%
of CEOs said availability of
skills was a serious concern,
an increase of 10% on 2014.
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Just as the industrial revolution did One of the biggest headaches for CEOs is
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
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
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
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?
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
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?
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%
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.)
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?
Key Disagree strongly Disagree Agree Agree strongly 9% 14% 67% 10%
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
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
25% France 3% 6% 74% 17% Banking and Capital Markets 6% 17% 63% 15%
Switzerland 10% 14% 67% 10% Business Services 9% 20% 62% 10%
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%
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%
Russia 18% 21% 48% 14% Forest, Paper and Packaging 10% 25% 51% 14%
Romania 22% 27% 32% 19% Asset Management 11% 26% 47% 16%
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 –but we plan to adopt one
8398
9292
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.48
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891
.7766
095
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29.45
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494
.74
145
798
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248
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.33
4310
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.72
524
31.072
157.3
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8070
.600.0 33.928549
40.714259
47.499969
54.285679
61.071389
67.857099
74.642808
81.428518
88.214228
94.999938
8398
9292
984
.4195
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.19
480
697
.48
573
891
.7766
095
.16
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40.714259
47.499969
54.285679
61.071389
67.857099
74.642808
81.428518
88.214228
94.999938
People strategy for the digital age
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.
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
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
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
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
Till Lohman
+49 40 6378-8835
[email protected]
www.pwc.com/people
PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by
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