Companies will look different over the next three years due to new business and work models. The changes are caused by the pandemic and are supported by digitization, according to the global PwC report.
78% of CEOs globally expect the organizations they lead to look different over the next three years due to the pandemic, anticipating changes in the way they work and the development of new business models, backed by investment in digitalisation, the report shows. “Great expectations: Global executives respond to business disruption”, developed by strategy &, the global strategy department of the PwC network.
According to the report, 23% of respondents say that the organizations they lead are reconfiguring for growth, while the rest are still focused on rethinking and optimizing the operating model (44%) and recovery after the health crisis (33%). All sectors will undergo transformations, the most important being expected in the pharmaceutical, insurance and transport industries.
An additional investment of an average of 10-15% will be directed mainly to digitalization, cyber security and sales, to stimulate growth. Investments in digitization will focus on the development of new products and services, IT capabilities and cybersecurity, as well as the environment, health and safety.
In general, companies want to reduce costs by up to 11%, with the largest decreases expected for real estate, research and development, marketing and human resources. Thus, 96% of companies consider the transition of labor in an “office of the future” to allow new ways of working during and after the pandemic, which will reduce the real estate footprint and thus costs.
In terms of staff, 37% of executives estimate staff reductions over the next 12 months, mainly in the industrial sector, in line with declining revenue expectations. Another 37% of executives say they will hire new staff.
Companies predict growth, but fear the effects of a new wave of infections. The main fears mentioned by CEOs for the future of their companies are the uncertainty of a new wave of infections (51%), its financial impact (48%), the impact of a global economic downturn (48%), cyber security risks (31%) and the ability to effectively manage hybrid models remotely and work in the office (26%).
Despite the risks, 72% of executives expect stable or rising revenues over the next 12 months, noting that they have already reached the lowest threshold and see a way back. Increases are expected in retail, medical services, insurance and financial services, but also in the automotive industry.
On the other hand, the forecasts of directors in the aerospace industry, industrial products and trade in non-food products are the most pessimistic, with 38% of respondents in these industries expecting declining revenues.
The survey was conducted among 250 senior executives in Europe, the Middle East, Africa, North America and Asia, who run companies with annual revenues of over $ 1 billion.
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