Only 14 per cent of chief executives in the UK now say they are planning to downsize – or have already downsized – their business’s physical footprint, according to an outlook survey by a multinational professional services network.
This marks a dramatic shift from August 2020, with the first wave of the pandemic at its peak, when 69 per cent of global leaders said that they planned to downsize their space.
CEOs of the world’s largest businesses are increasingly optimistic about the outlook for their own business, and despite a slower ‘return to normal’ than expected and globally only 21 per cent are looking to downsize.
The KPMG 2021 CEO Outlook asked more than 1,300 global CEOs – including 150 in the UK – about their strategies and outlook for the next three years.
CEOs say they are focused instead on providing increased flexibility for their workforce with 51 per cent (up from 14 per cent in the January/February’s pulse survey) – and 43 per cent in the UK – looking to invest in shared office spaces. Furthermore, 37 per cent of global and UK executives have implemented a hybrid model of working for their staff, where most employees work remotely two to three days a week.
The prospect of a stronger global economy is leading CEOs to invest in expansion and business transformation, with 69 per cent of senior executives (67 per cent in the UK) identifying inorganic methods (eg, joint ventures, mergers and acquisitions, and strategic alliances) as their organisation’s main strategy for growth. A majority (87 per cent) of global and UK leaders state that they are looking to make acquisitions in the next three years to help grow and transform their businesses.
The survey found that 30 per cent (35 per cent in the UK) of CEOs plan to invest more than 10 per cent of their revenues toward sustainability measures and programmes over the next three years.
Jon Holt, chief executive of KPMG in the UK, said: “After a difficult 18 months, it’s encouraging to see CEOs in the UK and globally thinking about growth and investment for the future with renewed confidence and optimism. CEOs have had to pivot their business strategies to face many uncertainties brought by the pandemic, and now they are looking to move their plans from resilience to expansion as the economy bounces back.
“ESG is also very much top of the agenda for CEOs, and they are right to build a sustainable recovery and make decisions that benefit wider society. Now is the time for a renewed push on setting out their businesses’ ESG credentials with COP26 just months away, and clients and investors laser-focused on working with businesses who have their own house in order.”
Bill Thomas, global chairman & CEO, KPMG, said: “Despite the continued uncertainty around the pandemic, CEOs are increasingly confident that the global economy is coming back strong. This confidence has put leadership in an aggressive growth stance. While inorganic growth strategies are a priority, CEOs are also looking to expand organically and continue to assess the future of work to ensure they can attract top talent.”