CEOs in New Zealand are optimistic about growth and plan to hire more people, but are worried about the skills needed and the rise of new technological risks.
Specifically, Kiwi chiefs are concerned about cyber threats (91 per cent), the availability of key skills (84 per cent) and the speed of technological change (84 per cent).
Outlined in PwC’s 20th annual NZ CEO survey, almost all (97 per cent) of local leaders are confident about revenue growth prospects for the next three years, while 91 per cent believe they will hit growth targets for the next 12 months.
The survey also painted a clear picture of where CEOs see growth coming from within their organisations - people, technology and businesses working together.
Across the country, organic growth plans are still very much on the agenda with 75 per cent still counting on it to drive profitability, compared to 79 per cent globally.
Meanwhile, 72 per cent of leaders see new opportunities in partnering with other firms, an area where local CEOs are well ahead of their overseas counterparts (48 per cent).
In addition, they are also 41 per cent more willing to work with entrepreneurs and start-ups than global counterparts, compared to 28 per cent globally.
“We’ve seen a lot of big changes in the business world in the 20 years we’ve run the CEO survey, but more so over the last few years and New Zealand companies definitely face more challenges,” PwC New Zealand CEO and Senior Partner, Mark Averill, observed.
“In New Zealand specifically, a lot of our concerns stem from uncertain economic and political times, coupled with the rapid changes that come from advances in technology.
“Technology has had a massive impact on the speed at which we operate, especially when it comes to the global market.
“From our perspective at PwC, our clients expect us to always be available and to have the ability to access both people and information globally. It is transforming the way we work.”
A diverse workforce fit for the future
Averill said the challenge of finding, training and keeping the right people for the business has been top of mind for local CEOs for the past few years.
“This year is no different, with CEOs still finding it difficult to recruit people with the skills they need,” he said.
More than half (53 per cent) of CEOs plan on increasing headcount this year with 81 per cent wanting to change their people strategy to reflect emerging skills and employment structures they will need in the future.
With the speed of technological change a concern for 84 per cent of CEOs, Averill said it’s no surprise that skills in leadership and emotional intelligence, creativity and innovation and digital are identified as the most valuable yet difficult to recruit.
“Attracting and developing great people who are relevant to the future of our business is an important focus for companies across the board,” he added.
“We’ve started to work more closely with universities to ensure graduates have the skills needed to make a difference in this changing business environment.
“Diversity of thought is also critical - we have to be recruiting people who think differently if our companies are going to be ready for the future.
"It’s about embracing all aspects of diversity as an everyday business matter - which is something we’re focusing on here at PwC New Zealand.”
Building trust in a digital world
From a technology perspective, Averill said trust is now “more important than ever”, with 72 per cent of CEOs reporting that it's harder to gain and keep trust in an increasingly digitised world.
Equally concerning was cyber security, with 94 per cent feeling that cyber breaches will negatively impact trust in their industry and half of these saying it will be ‘to a large extent’.
“Cyber security has been an increasingly worrying issue over the last three years, with concern growing from 66 per cent in 2015 to 77 per cent in 2016 and now sitting at 91 per cent,” Averill added.
“It’s clear that cyber attacks are happening around the world and that fear is valid, but unfortunately there isn’t a quick fix to the issue.”
In New Zealand, the good news is that organisations are responding to these new threats and investing more in risk management tools.
In the case of cyber security, 97 per cent of CEOs are addressing these risks within their businesses while for social media, 81 per cent of CEOs are also managing these risks to some extent.
“Building a business that is driven by great ideas has to start with having the right people,” Averill added.
“You must then support them with the right technology.
“Trust is equally important, without it you can’t solve the really important problems. Those businesses that are successful at building trust and creating transparency - not just with their clients and within society, but amongst their people as well - will have a competitive advantage.”
Working together to achieve sustained growth
With the uncertainty surrounding Brexit and predictions of a Trump slump, Averill said it’s encouraging to note that CEOs still consider Australia (72 per cent) to be a top contender to help New Zealand grow.
However, the USA shares the number one spot, having grown in popularity from last year (2016: 47 per cent), while China (63 per cent) rounds out the top-three destinations.
“This Pacific-first mindset certainly is good for our future growth,” Averill added. “Since our first CEO Survey, China has gone from our eighth-largest trading partner to our second-largest, with exports nearly quadrupling.”
Here in New Zealand, Averill observed that globalisation has also changed the demographics of the country.
“A recent World Migration report found that Auckland is more ethnically diverse than New York, Sydney and London,” he explained.
“It’s a huge opportunity for our companies, not just as a way to develop that diversity of thought, but also to create new growth opportunities and business connections across the Pacific region.”