Launching the PwC 2017 CEO Pulse survey are (l-r): Frances Fitzgerald, Tánaiste and Minister for Enterprise and Innovation and Feargal O'Rourke, Managing Partner, PwC.
PwC's 2017 CEO Pulse survey reveals that the majority of Irish CEOs are confident about the economy and their businesses, but less so than last year.
The survey was carried out in Spring and Summer 2017, with over 200 CEOs across all industry sectors taking part.
The key findings of the survey include:
Geopolitical risks including Brexit (89%) and the potential impact of new US policies (81%) are having an effect on CEOs outlook. They also feel that ensuring Ireland has a clear national strategy to deal with Brexit should be the top priority of Government right now.
Other areas that may impact future business growth, according to the CEOs, include: high personal tax burdens (93%); rising wage costs (88%) and cyber threats (86%). 84% are concerned about the lack of affordable housing/office space, up from 67% last year; 81% are concerned about the availability of key skills and remains at an all-time high in our 12 year survey.
Speaking at the survey launch, Feargal O'Rourke, Managing Partner, PwC Ireland, said: "The confidence level is down slightly on last year, but this is hardly surprising given concerns relating to Brexit and other geopolitical factors. But uncertainty also brings opportunity, and many Irish CEOs do see opportunities arising. Not surprisingly there is a strong focus on export markets. Overall, in weighing up the opportunities and uncertainties, CEOs are slightly more cautious in their outlook with a consequent impact on the pace of investment decisions. Nevertheless they remain focused on the growth potential of their businesses."
Launching the survey, Frances Fitzgerald, Tánaiste and Minister for Business, Enterprise and Innovation, said: "This survey serves as a useful indicator on future trends in Irish business and adds to the extensive research that my own Department is conducting also. It is positive to note that, despite the uncertainties, the majority of Irish CEOs are continuing to plan for growth in their businesses. There is no doubt, however, that Brexit is a key concern for policy makers and business leaders. This Government is doing everything possible to respond strongly to the impacts of Brexit by working with international and local stakeholders to provide supports to business and safeguard Irish jobs in every part of the country.”
Ireland continues to be provide an excellent environment for multinationals to establish global business operations to sell to Europe and further afield. This is confirmed by 96% of survey respondents, who confirmed that their investment here is a success and is a record high in the survey; 91% said that they will maintain or increase this investment.
Joe Tynan, Head of Tax, PwC Ireland, said: "Ireland continues to be the number one location in Europe for FDI. Companies choose Ireland for a number of factors including its successful track record and the consistent and low corporate tax rate of 12.5%. Companies require the best talent to compete. Ireland, in comparison to other countries is considered more welcoming to employees from across the EU. This allows companies to establish here and to serve all of the EU – in their own language.
"The changing international tax landscape is a positive for Ireland. It is requiring companies to earn their profits where they have substantial operations. This is reducing the attractiveness of Caribbean tax havens and also reducing the attractiveness of countries who agree tax liabilities based on a ruling. It is enhancing the attractiveness of Ireland which offers a low corporate rate and the ability to set up substantial operations here."
Critical factors cited to preserve this investment in Ireland, according to the survey, include: retaining a competitive corporate tax rate (58%); maintaining and increasing our cost competitiveness (47%); ability to attract a highly skilled workforce (42%); a positive outcome for Ireland on the Brexit negotiations (33%) and reducing the personal tax burden (29%). Over a quarter (27%) also viewed the impact of any potential tax reforms by the US Administration as important.
The survey suggests that Irish organisations (62%) lag their global counterparts (78%) when it comes to changing people strategies to reflect future skills needs. Less than half are rethinking their HR strategy compared to 60% globally.
Less than a quarter (24%) are focusing on the pipeline of leaders for tomorrow, down from 42% last year. Irish business leaders reported the top change to their talent strategies to be workplace culture and behaviours (64%), up from 53% last year.
Gerard McDonough, Director, People & Organisation, PwC, said: "Concerns around the lack of key skills in Ireland have been very high for the last five years and have outpaced global concerns. But the survey suggests that the most valued skills are shifting towards the 'soft' human capabilities such as adaptability, creativity, innovation and emotional intelligence.
"At the same time, less than a third (31%) is considering the impact of automation/robotics on the future skills needs compared to 39% globally. Getting talent management strategies right in an increasingly digitised world, where humans and machines work alongside each other, may be the biggest challenge leaders will ever face."
Business trust continues to be central to the CEO agenda and nearly half (48%) of Irish CEOs believe that the lack of trust in business is a threat to growth. This is getting more challenging in the digital era and nearly two-thirds of Irish CEOs (61%) confirm that in an increasingly digitised world it's harder for business to establish and maintain trust. Global CEOs admit to finding it even more challenging (69%).
Ciaran Kelly, Advisory Leader, PwC Ireland, said: "The survey highlights that while Irish CEOs accept that trust is critical, they are, worryingly, less concerned than global peers about how a number of key potential disruptors such as data breaches, IT outages and artificial intelligence will impact on stakeholder trust levels in the next five years.
"The survey further suggests that Irish organisations are not addressing these key disruptors to the same extent as their global peers, for example, the survey suggests that 40% of Irish CEOs are not seriously addressing cyber security breaches affecting business information or critical systems. CEOs need to recognise that trust can be easily destroyed in a digital era and they cannot deny the unstoppable progress of digital that continues to infiltrate our personal and business lives."
Notes to editor:
About the survey
The survey was carried out in Spring/Summer 2017 amongst Irish CEOs having over 200 participants across all industry sectors.
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