PwC 2012 CEO Survey

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Figure 1: CEOs’ personal priorities include spending more time with customers and developing leaders

Q: Do you wish that you personally could spend more time, less time or the same amount of time on each of the following activities?

Net priority (% of respondents reporting ‘More time’ minus % of respondents reporting ‘Less time’)

Develop leadership and talent pipeline

Meet with customers

Improve organisational efficiency

Set strategy and manage risks

Develop operations outside of my home market

Personal time or community service

Meet with regulators and policy makers

Meet with lenders and providers of capital

Meet with the board and shareholders

%

66

66

57

51

40

34

5

-4

-5

Operations

People

Governance

Base: All respondents (1,258)Source: PwC 15th Annual Global CEO Survey 2012

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Figure 2: Half of CEOs expect the global economy to decline in 2012

Q: Do you believe the global economy will improve, stay the same, or decline over the next 12 months?

15%4%

34%

48% 36%

Improve

Stay the same

Decline

Don’t know


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Figure 3: Short-term confidence has declined – but remains well above the levels seen in 2009 and 2010

Q: How confident are you about your company’s prospects for revenue growth over the next 12 months? Yearly comparison.

Very confident about company’s prospects for revenue growth

over the next 12 months

26%

31%

41%

52%50%

21%

31%

48%

40%

0

10

20

30

40

50

60%

2012201020092008200720062004 20052003 2011

Base: All respondents (2012=1,258; 2011=1,201; 2010=1,198; 2009=1,124; 2008=1,150; 2007=1,084; 2006 (not asked); 2005=1,324; 2004=1,386; 2003=989)Note: Percentage of CEOs who are very confident about their companies’ prospects for revenue growthSource: PwC 15th Annual Global CEO Survey 2012

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Figure 4: Talent remains priority no. 1 for CEOs

Q: To what extent do you anticipate changes at your company in any of the following areas over the next 12 months?

Strategies for managing talent

Organisational structure (including M&A)

Approach to managing risk

Captial investment decisions

Focus on corporate reputation and rebuilding trust

Capital structure

Engagement with your board of directors

No change Some change A major change

%

2012

%

2011

21

26 50 22

32 50 17

38 42 19

49 35 15

55 29 14

63 27 8

55 23 17

25 47 27

23 54 23

23 48 28

36 41 22

50 34 15

52 34 12

52 31

Base: All respondents 2012 (1,258); 2011 (1,201)Source: PwC 15th Annual Global CEO Survey 2012

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Figure 5: CEOs eye the expanding buying power of emerging markets

Private consumption at current market exchange rates

20102020

Private consumption in current prices and market exchange rates, US$ millions 20

10

5

Australia

Canada

China & Hong Kong

Japan

Korea

Russia

India

Turkey

Sub-Saharan Africa

Latin America

US

EU27

ASEAN

MENA

Source: Oxford Economics

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Figure 6: Growing customer bases is far from the only objective of CEOs in their key overseas markets

Q: Which of the following objectives do you hope to achieve in the next 12 months? (The top 10 countries mentioned by CEOs in ‘Which countries, excluding the one in which you are based, do you consider most important for your overall growth prospects over the next 12 months?’)

AustraliaJapanFranceUKRussia

GermanyIndiaBrazilUSAChina

Build R&D/innovation capacity or acquire intellectual property

Build manufacturing capacity

Access raw materials or components

Access local source of capital

Build internal service delivery capacity

Access local talent base

Grow your customer base

79

55

46

14

34

30

27

87

53

49

1626

31

19

78

47

36

125

12

22

76

42

38

96

11

15

81

44

34

1021

10

29

85

49

36

1719

21

19

71

46

30

23

1917

26

83

61

55

11

31

33

22

79

61

54

1231

38

31

72

32

32

16

14

10

24

Base: China (383); USA (275); Brazil (188); India (176); Germany (152); Russia (101); UK (81); France (66); Japan (62); Australia (53)Source: PwC 15th Annual Global CEO Survey 2012

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Figure 7: A modest decline in cross-border M&A is expected in 2012

Q: Which, if any, of the following restructuring activities do you plan to initiate in the coming 12 months? Responses of ‘Complete a cross-border merger or acquisition’.

% of CEOs anticipating M&A (left axis)

Number of deals (right axis)

70

110

100

90

Num

ber o

f dea

ls (1

00 =

200

8)

% o

f CEO

s an

ticip

atin

g M

&A

80

0

40%

30%

20%

10%

2012F201020092008 2011

Base: All respondents (2012=1,258; 2011=1,201; 2010=1,198; 2009=1,124; 2008=1,150)Note: Number of deals is all completed deals where final stake is greater or equal to 20%.Source: PwC 15th Annual Global CEO Survey 2012; Dealogic

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Figure 8: Pulling away from an export mindset to meet local demand

Q: For each of the countries that you intend to grow your customer base, which of the following three statements best describes your approach to product and service development? (The top 10 countries mentioned by CEOs in ‘Which countries, excluding the one in which you are based, do you consider most important for your overall growth prospects over the next 12 months?’)

20

39

37

27

34

37

22

42

34

17

49

31

36

30

32

24

42

33

24

43

29

19

50

30

26

46

25

30

46

20

100

75

50

25

0

%

Products and services are the same as in our headquarters’ market

Products and services are modified to meet local market needs

Products and services are developed specifically for local market requirements

Germany US France Brazil Japan Australia UK Russia China India

Base: China (302); USA (195); Brazil (156); India (139); Germany (110); Russia (88); UK (63); France (50); Japan (50); Australia (45)Source: PwC 15th Annual Global CEO Survey 2012

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Figure 9: Many industries see significant pressure for both process innovations and radical innovation

Q: To what degree are you changing the emphasis of your company’s overall innovation portfolio in the following areas? Responses of ‘significantly increase’.

0

0

10

20

30

40

50

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New business models

Global average

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2

3

4

5

6

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10

11

12

13

14

15

16

17

18

19

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3

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Business and Professional Services

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Automotive

Transportation & Logistics

Metals

Industrial manufacturing

Retail

Consumer Goods

Hospitality & Leisure

Chemicals

Forestry, Paper & Packaging

GlobalConstruction/Engineering

Asset Management

Pharma & Life

Insurance

Technology

Communications

Entertainment & Media

Base: All respondents (29-245) Source: PwC 15th Annual Global CEO Survey 2012

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Figure 10: Global economic uncertainty remains the top threat to growth prospects

Q: How concerned are you about the following potential threats to your business growth prospects?

North America

Uncertain or volatile economic growth

Public deficits

Over-regulation

Unstable capital markets

Exchange rate volatility

Protectionism

Western Europe


Public deficits


Shift in consumers

Over-regulation


Asia Pacific




Public deficits

Over-regulation

Shift in consumers

Inflation

Latin America


Over-regulation


Public deficits

Bribery and corruption


Protectionism

CEE




Public deficits

Over-regulation


Middle East/Africa


Public deficits

Over-regulation



Inflation

Business threats Denotes equal rankingEconomic and policy threats


Availability of key skills

Shift in consumers

Increasing tax burden

New market entrants


Inability to finance growth


Energy costs



Energy costs



Inadequacy of basic infrastructure


Shift in consumers


Energy costs



Shift in consumers

Energy costs

Base: North America (236); Western Europe (291); Asia Pacific (440); Latin America (150); CEE (88); Middle East/Africa (53)Note: Rank of top threats, by % of somewhat or extremely concernedSource: PwC 15th Annual Global CEO Survey 2012

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Figure 11: Talent constraints have impacted costs – but also factor in lost opportunities

Q: Have talent constraints impacted your company’s growth and profitability over the past 12 months in the following ways?

Our talent-related expenses rose more than expected

We weren’t able to innovate effectively

We were unable to pursue a market opportunity

We cancelled or delayed a key strategic initiative

We couldn’t achieve growth forecasts in overseas markets

We couldn’t achieve growth forecasts in the country where we are based

Our production and/or service delivery quality standards fell

%

43

31

29

24

24

24

21


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Figure 12: Different industries, different requirements – but skills gaps remain

Q: In general, has it become more difficult or less difficult to hire workers in your industry, or is it unchanged?

Global

Consumer goods

Automotive

Healthcare


Technology

Insurance

Pharamceuticals & Life sciences

%

Less difficult More difficult

Sectors above the globalaverage in % of CEOs responding‘More difficult’

12 43

11 44

8 46

9 47

14 47

12 48

10 49

6 51

-16 37

-21 34

-19 28Base: All respondents (29-245)Note: Responses of ‘unchanged’ not depicted.Source: PwC 15th Annual Global CEO Survey 2012

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Figure 13: Half of CEOs expect to raise their headcount in 2012

Q: What do you expect to happen to headcount in your organisation globally over the next 12 months?

Healthcare

Business services

Technology

Communications

Chemicals

Automotive

Global

Insurance

Entertainment & Media


Banking and Capital markets

Asset management

Consumer goods

Construction/Engineering

Retail

Pharmaceuticals & Life sciences

Transportation/Logistics

Metals

Hospitality & Leisure

Forestry, Paper & Packaging

Increase by less than 5% Increase by 5-8% Increase by more than 8%

Decrease by less than 5%Decrease by 5-8%Decrease by more than 8%

%

6 6 93138

5 6 181723

1124 191820

7 14 191224

1 11 101134

3 4 7 1026 16

22 15

3 4 11 14 1423

3 103 1225 13

5 4 10 2024 6

7 7 1511 25 8

123 63 1819

6 5 6 131321

44 15 91820

1344 1917 10

4 173 111322

5 121 111220

15 12 121017

1553 513 18

3 717 14317

10 188 81410

Base: All respondents (29-245)Note: Responses of ‘stay the same’ not depicted.Source: PwC 15th Annual Global CEO Survey 2012

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Figure 14: A minority of CEOs get comprehensive reports on their workforce

Q: When making decisions, how important is it to have information on each of the following talent-related areas? For those areas that are important to you, how adequate is the information that you currently receive?

% of CEOs who believe the relevant information is important or very important

Per

cent

age

of C

EOs

100

80

60

40

20

0Costs of

employeeturnover

Return oninvestment onhuman capital

Assessmentsof internal

advancement

Labour costs

Employees’views and

needs

Staff productivity

Information Gap:CEOs believe information is important but don’t receive comprehensive reports

Do not receive information

Not adequate

Adequate but would like more

Information received is comprehensive


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Figure 15: Recruiting and retaining high-potential middle managers is the biggest concern for CEOs

Q: With which of the following groups do you currently face the greatest challenges with regard to recruitment and retention? Respondents were able to choose all that applied.

High-potential middle managers

Skilled production workers

Younger workers

Senior management team

Overseas unit heads

%

Emerging Markets Developed Markets

5550

3531

3230

3521

1321

Base: All respondents (621; 637) Source: PwC 15th Annual Global CEO Survey 2012

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Figure 16: CEOs are more focused on recruiting local talent and developing and promoting from within

Q: With regards to plans for your global workforce over the next three years which of the following statements do you feel is more likely to occur?

We plan to move experienced employees from our homemarket to newer markets to circumvent skills shortages

We plan to develop and promote most ofour talent from within the company

We plan to primarily recruit local talentwherever we have market needs

We plan to move experienced employees from newer markets to home markets to circumvent skills shortages

We plan to recruit more experienced talent from outside the company

We plan to move more talent across borders to fill market needs

%

Agree with statement

Don’t know

Agree with statement

53 16

67 24

70 19

31%

8%

11%

Base: All respondents (1,258) Source: PwC 15th Annual Global CEO Survey 2012

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Companies are getting more local about their global growth strategies.

Many are expanding capabilities in their priority markets and innovating locally to better serve new customers in new segments.

Seeking growth outside familiar markets calls for careful monitoring of ongoing risks, both at the local level and by considering their potential impacts on global businesses.

CEOs are also challenged to address talent issues more systematically and strategically in all their markets.

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Securing the talent to succeed: Making the most of international mobility in financial services

www.pwc.com/financialservices

How financial services organisations can make sure they have the right people with the right skills in the right places to realise their goals.

November 2011

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$$$@D$>@>#?j>.#=-"+.8'PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.

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