Jon Holt

In its 10th annual CEO Outlook survey, KPMG spoke to more than 1,300 CEOs around the world – 150 in the UK – in July and August, revealing that two thirds of UK CEOs (65% and 76% globally) see GenAI as a positive disruptor with 68% (65% globally) agreeing that GenAI remains a top investment priority.

The majority of UK chief executives (71% and 76% global) said GenAI will not fundamentally impact the number of jobs in the market, instead existing jobs could be redeployed, and the new tech is expected to enable upskilling. A further third said it will create more jobs. This belief is replicated across the broader population of CEOs around the globe.

And while UK chief executives see GenAI as an opportunity, they see cyber security as the main risk to growth over the next three years – a risk that wasn’t even top three last year.

Commenting on the survey’s findings Jon Holt, chief executive and senior partner of KPMG UK, said: “GenAI presents a genuine opportunity to help solve the UK’s productivity puzzle and chief execs see it as a positive disrupter, which will change the nature of work. But they are also alive to the threat of cyber security, which is why care must be taken with any GenAI roll out.

“As an engine for economic growth the UK services industry is at the cutting edge of embracing GenAI, helping clients transform their businesses, drive growth and speed ahead in the race to embed this revolutionary technology.

“The GenAI story is changing every day, and this is only the beginning. But the leaders who do get it right, can look to a motivated workforce, empowered to do more interesting and productive work.”

More chief executives expect a full return to office working in next three years

The debate about hybrid working continued for chief executives, with 83% of UK bosses (also 83% globally) believing there will be a return to pre-pandemic ways of working (in-office) within the next three years, up from 64% in 2023. While 81% (87% globally) say they are likely to reward employees who come into the office, up significantly from 56% in 2023.

UK bosses are evenly split in terms of prioritising investment in skills (49%) and capital investment (51%), while the number of employees retiring without a skilled workforce to replace them with is the largest issue for almost a third (30%) of UK CEOs when it comes to workforce management.

UK CEOs still upbeat on growth of UK economy and their own businesses

While encouragingly 75% of CEOs in the UK are still upbeat about their companies’ growth prospects, this has seen a slight drop from 77% last year. Business leaders surveyed also revealed they are less confident in the growth of the UK’s economy compared to last year (79% down from 83%), with this confidence dropping to 70% when considering global economic growth (down from 73% last year).

Economic uncertainty and embracing new tech are the challenges chief executives face today, while cyber security and supply chain issues pose the greatest threat over the next three years – risks that weren’t top of mind last year.

Despite these concerns, over the next three years a third of UK CEOs said they expect their headcount to increase between 6-10% (34% UK and 31% global) with M&A activity and organic growth driving their strategies, alongside investment in GenAI.

Mr Holt added: “UK chief executives are still feeling optimistic when it comes to the growth prospects of their companies and our economy over the next three years, but persistent economic headwinds and uncertainty mean inevitably this optimism will dip at times.

“The UK is a great place to do business, which is why CEOs are confidently investing in emerging technology, looking ahead to M&A activity and pursuing organic growth – all of which will drive profitability and help deliver a healthier economy.”

Climate change and the environment dropped out of the top three risks for UK CEOs in 2024, having been the second highest risk in 2023.

Only 55% of UK chief executives (51% global) are confident that they will meet their Net Zero goals by 2030, with the complexity of decarbonising supply chains (31% UK and 30% globally) cited as the greatest barrier to achieving these ambitions, followed by lack of appropriate technology to gather and analyse data (21% UK and 16% global).