Local leaders remain more optimistic on economic growth, according to a new global outlook survey
Australian CEOs' expectations on full-time office returns have undergone a dramatic change, according to a new global report from KPMG, which found local leaders are more optimistic about the economy than their international counterparts.
The 2025 Global CEO Outlook found that just 22% of local CEOs expect corporate employees back onsite full-time in the next three years, a drop from 82% a year ago.
Expectations on full-time office return have dropped as 74% of CEOs expect hybrid work to continue, according to the report.
Nearly half of Australian business leaders (48%) expect employees to be onsite three days a week, while only eight per cent expect them to be in-office for two days.
"The numbers confirm what we have long suspected: a return to a fully back-in-the-office workforce in Australia is unlikely," said KPMG Australia CEO Andrew Yates in a statement.
The findings come as Robert Half's poll last month showed that most employers plan to maintain their current in-office mandates and/or hybrid work arrangements for the next 12 months.
"The majority of CEOs have said that they've found three days a week in the office to be the sweet spot, but I think ultimately it's about what works for each business," Yates said.
Headcount and AI
The annual report found 92% of chief executive officers around the world plan to expand their headcount in the next year, with artificial intelligence being a key factor in hiring plans.
The findings indicate cautious optimism, according to KPMG, as the share of CEOs confident in the current trajectory of the world economy declined to 68%, down from 72% in the previous year.
The majority of CEOs (88%) also noted that an ageing workforce has a moderate to high impact on recruitment, retention, and culture.
According to the report, 30% of CEOs are observing a growing generational gap on key future skills, while 24% are worried about the number of employees retiring without enough skilled workers to replace them.
"Ultimately, the leaders who can embrace market volatility and focus investments in the right strategic areas for their organisation will be the ones best placed to unlock new opportunities and build sustainable, long-term growth," said Bill Thomas, KPMG's global chairman and CEO, in a statement.
The annual KPMG 2025 Global CEO Outlook surveyed more than 1,300 global leaders to look into their mindset, strategies, and planning tactics.
When it came to confidence in the economy, 90% of Australian CEOs said they were confident in Australia’s growth, compared to 82% of CEOs globally who were confident in the growth of their domestic economies.
“I’m not surprised that Australian CEOs are still feeling optimistic about the growth of our economy, given household spending has seen a recent uptick, and the RBA has cut the cash rate. While the global economy is still facing uncertainty, Australia is less impacted by tariffs than many other countries and so our export markets have remained strong,” Yates said.
AI a factor in talent investment
The growing integration of artificial intelligence tools in workplaces is also a key factor in many organisations' plans for their workforce, according to the report.
More than six in ten (61%) employers said they are planning to hire new talent with AI and tech capabilities. It comes as 70% of leaders recognised that competition for AI talent could slow down success.
Sandy Torchia, KPMG International's Global Co-head of People, said having a rounded and people-centred employee value proposition was key.
"Because it's the human factors that will attract talent," Torchia said in a statement. "Making this resonate across the widening generational spread is another critical factor that CEOs and people leaders are grappling with in an ever-more complex world."
Meanwhile, upskilling is also a major focus for CEOs, as 77% of them agreed that workforce AI readiness and upskilling will impact their organisations over the next three years.
"As people are on the front line of utilising AI in their daily roles, upskilling and equipping them for the task has become an enormous area of focus," Torchia said.
Part of CEOs' long-term workforce strategy in response to AI is retaining and retraining high-potential talent (71%). Others said:
- Redesigning roles and career paths to reflect AI collaboration (67%)
- Deploying staff from traditional roles to AI-enabled roles (59%)
- Planning for workforce reductions in some areas (41%)
"It's clear from our findings that CEOs are finding opportunities from disruption by investing boldly in technology, innovation, and talent," Thomas said.
"With what we are seeing, there's a careful balance required between innovation and responsibility. CEO responses on AI exemplify this, with leaders recognising the need to embrace innovation while managing concerns over ethics, regulation, upskilling, and access to talent."
AI a strong focus in Australia
AI is also a strong focus for CEOs in Australia, with 70% of them saying that it is a top investment priority, according to the KPMG report.
Despite this, 29% of CEOs said they are committing less than 10% of their overall investment budget to AI. Another 40% said they are still learning as they go when it comes to technology.
"Australia stands at a pivotal moment in harnessing the power of AI, but adoption requires more than just enthusiasm, it requires a strategic plan that builds trust and confidence in its use," said KPMG Australia CEO Andrew Yates in a statement.
"By empowering businesses to invest in AI and equipping the workforce with the necessary training, we can not only drive innovation but also ensure that the benefits of AI are shared equitably across the economy."
