Nine in ten Indian CEOs likely to reward back-to-office employees with raises, promotions & more

• In India, 58% of CEOs compared to 57% CEOs globally agree that ethical challenges are a significant obstacle to adopting generative AI within their organisations, while 56% CEOs in India compared to 55% CEOs globally cite implementation cost as a major barrier.
• Over 89% CEOs in India compared to 87% CEOs globally are likely to reward employees who try to come to office with raises, promotions, and favourable assignments.
• Geopolitical risk was not even a top concern last year and is now the biggest issue for CEOs across the globe.
  

Heavy is the head, they say, that wears the crown. Leadership is the flipside of challenges. One would have thought that the challenges that pandemic brought would make any challenge look like a cake walk. But the era of challenges is not over for corporate captains.

According to KPMG’s CEO survey, broader political uncertainty and geopolitical tensions are now the greatest risk to business growth. Other thorns in their flesh also include bringing employees back to office and deploying AI across their organisations. KPMG’s survey is based on inputs given by 1,300 CEOs of the world’s largest businesses, of which 125 CEOs were from India.

It is not just geopolitics or political instability that gives sleepless nights to industry leaders. From disruptive technologies to bringing employees back to work, CEOs have their task cut out as we leave the pandemic era behind us.

Emerging/disruptive technology is a primary risk and one of the greatest threats to organisational growth for CEOs in India as well as globally. CEOs in India and globally are prioritising investments in generative AI as a key competitive advantage for the future, with 66% of CEOs in India compared to and 70% of CEOs globally considering it as a top investment priority for their organisation.

For those employees hoping that work from home is here to stay, please beware that company bosses want people to come back. Over 89% CEOs in India compared to 87% CEOs globally are likely to reward employees who try to come to office with raises, promotions, and favourable assignments.

Apart from talent and geopolitical risks, CEOs also worry about new disruptive technologies like GenAI. In India, 58% of CEOs compared to 57% CEOs globally agree that ethical challenges are a significant obstacle to adopting generative AI within their organisations, while 56% CEOs in India compared to 55% CEOs globally cite implementation cost as a major barrier.

The KPMG 2023 India CEO Outlook shows geopolitics and political uncertainty have become the leading perceived risk this year for senior executives – concerns that didn’t even make the top three of the five risks in 2022.

That said, the confidence of CEOs in India in terms of growth prospects for the global economy over the next three years has considerably increased to 69% in 2023 from 57% in 2022, demonstrating optimism and a strong resilience towards a long-term growth trajectory.

The level of confidence of CEOs in India in their own company’s growth prospects too has remained mostly unchanged from the past year (71% in 2023 compared to 72% in 2022), contrary to the declining confidence of CEOs globally (77% in 2023 compared to 85% in 2022), indicating their resilience in weathering the storms of uncertainty.

Even though CEOs in India see a slight decline in growth prospects for the country in 2023 from 2022 levels, they exhibit enough resilience to recover in the short-term.

However, the volatile nature of geopolitics and trade patterns, combined with rising interest rates and monetary tightening could act as a headwind for companies. Interestingly, only a small fraction of CEOs in India compared to their global counterparts share this viewpoint, which reflects positively on India.

“CEOs in India are facing challenges and obstacles to growth on multiple fronts – from geopolitical uncertainty and politicisation to increased stakeholder expectations in the ESG space and the adoption of generative AI. Even though leaders in India are having to deal with macroeconomic and geopolitical challenges right now, they are positive on the growth prospects of the global economy as well as their organisation, which is very reassuring. There’s general optimism that we can, in time, gradually return to long-term sustainable growth,” said Yezdi Nagporewalla, Chief Executive Officer, KPMG in India.

“Today, the opportunity to move towards a fair, equitable and successful planet is huge and leaders should look to make the most of it.The key to success would hinge on steadfast focus on seeing the bigger picture, strategic planning, and determination to tackle the challenges in the short-term with agility,” added Nagporewalla.