Indian CEOs Less Confident About Economic Growth, 62% Took Salary Cuts Due to Pandemic: Survey

Corporate leaders in India are less confident about economic growth and 6 out of 10 CEOs have taken salary cuts as part of the overall cost management measures amid the pandemic, according to a survey. As per a survey carried out by KPMG India in August among 100 CEOs, only one-third of the respondents said they are confident of economic growth and 62 per cent of them have taken salary cuts as part of the overall cost management measures to sail through the pandemic.

Only 33 per cent of CEOs are confident of the economy and 42 per cent are optimistic about growth of their companies, as against 78 per cent and 84 per cent in the January survey, respectively. Commenting on the findings, Arun Kumar, the chairman of KPMG India, says the significant shift in CEOs’ priorities seen over the last six months reflect the agility with which they had to deal with the challenges of the pandemic.

Looking forward, like their global counterparts, CEOs here are less confident about global and domestic economic growth than they were at the onset of the year. Their earnings outlook is clearly challenged, he says. The respondents listed supply chain risks and digital disruption and enhancing Environmental, Social, and Corporate Governance (ESG) programmes as their top concerns.

As per the survey, a large number of respondents have identified “lack of skills and capabilities in the IT area” as one of the most significant challenges to growth. The CEOs have already seen accelerated progress in digital transformation during the pandemic and are likely to prioritise investments in new technologies to become future-ready, and 89 per cent of them plan to invest more on technology, the survey noted.

As per the survey findings, Indian corporate leaders are better positioned than their global counterparts in terms of growth in earnings as only 19 per cent of them expect earnings to either remain flat or decline, while 23 per cent globally foresee their companies’ earnings to stagnate or fall. Moreover, CEOs globally feel a greater need to re-evaluate their purpose amidst the pandemic, than their domestic CEOs. As much 79 per cent of CEOs globally have had to re-evaluate their purpose, compared to only 37 per cent here.

The pandemic has led to a dramatic shift in how business leaders are assessing potential risks now, compared to the pre-pandemic times. CEOs, while ensuring short-term survival of their companies, are likely to delve deeper into the impact of this crisis to realign strategies for long-term growth.

As much as 89 per cent would continue to build on use of digital collaboration and communication tools, while 77 per cent believe they have access to wider talent pools and 48 per cent will consider downsizing their office spaces, the survey noted.