ASIA-PACIFIC CEOs are seriously concerned about the availability of key skills and strongly believe that their organisations need to change the way they develop talent, a global study has found.
More than two-thirds of all CEOs globally believe their time is best spent dealing with people issues, and in the Asia-Pacific, CEOs said that combined technical and business experience, global work experience and leadership skills are the most difficult areas for their companies to recruit.
However, the PricewaterhouseCoopers study, which took in 1,150 CEOs across 50 countries (including 277 in the Asia-Pacific), found that global experience was ranked last among a list of skills that are critical to their organisation.
“Making sure that their companies have the right talent in place remains a core issue for CEOs around the world,” said Samuel DiPiazza, global CEO of PricewaterhouseCoopers.
“Regardless of the other issues swirling around them, CEOs clearly understand that having people with the right balance of commercial, technical and management skills is the key to success in their organisation.”
The study also found that CEOs’ confidence about prospects for business declined and fear of a global recession emerged as the major threat to growth. Compared to last year, possible economic downturn is the only risk factor to increase in concern among CEOs.
All other risks to growth, including energy supply, global climate change and terrorism, declined as business threats.
“The credit crunch and the slowdown in the Western economies have created a clear split in the confidence levels of CEOs around the world,” said DiPiazza.
“The possibility that the downturn could worsen into recession looms large for CEOs in established economies like the US and Western Europe. In the newly-emerged economies CEO confidence remains strong, perhaps because they have experienced nothing but rapid expansion for a decade or more.”
CEOs were also less concerned about regulation. In contrast to previous years, when regulatory issues such as Sarbanes-Oxley dominated CEOs thoughts, the threat of over-regulation declined this year, though it remained among the top three concerns of CEOs.
Over-regulation was mentioned by 59 per cent of respondents, down from 73 per cent in the previous survey. CEOs felt labour laws, tax regimes, and education were the top areas in which governments could make improvements.
Just 5 per cent felt improvements were needed in regulation over initial public offerings or listings on stock exchanges. Overall, more than half of CEOs said that governments should drive convergence of tax and regulatory frameworks.
Global merger and acquisition (M&A) activity is also set to rise in 2008, as 24 per cent of CEOs said their company had completed at least one cross-border merger or acquisition within the past 12 months, while 31 per cent plan to do so within the next 12 months.
Interest in M&A in 2008 is highest in Asia-Pacific, where CEOs are most confident, and where Asia-Pacific companies have increasingly become the acquirers rather than the acquired.
CEOs in the Asia-Pacific are planning M&A activity both close to home and abroad. Only 23 per cent of Asia-Pacific CEOs have completed at least one cross-border deal within the past year, but 34 per cent – a higher percentage than in any other region – say that they intend to do so within the next 12 months.
Of those Asia-Pacific CEOs planning M&A in the next 12 months, 25 per cent foresee a transaction in Western Europe, 31 per cent in North America and 73 per cent closer to home in Asia.
Obstacles to M&A activity were headed by cultural issues and financial considerations. However, the issues of political interference or opposition and possible backlash against a foreign presence in local markets have increased as barriers to cross-border M&A.