Majority of Canadian CEOs expect full return-to-office within next three years: KPMG

The majority of Canada’s most influential CEOs are eager to get employees back into the office full-time, new research shows.

KPMG International’s 10th CEO Outlook survey found that 83% of Canadian CEOs now expect a full return-to-office within the next three years—up sharply from 55% in 2023.

Ninety per cent say they are likely to reward employees "who make an effort to come into the office with favourable assignments, pay raises or promotions," up from 77% last year.

But Canada’s small- to medium-sized business owners aren’t convinced.

Only 20% of SMBs expect a full return-to-office within that time frame, though 85% say they would offer rewards to entice a return. Nearly 65% fully expect a hybrid workforce in three years.

KPMG’s survey found Canada’s business leaders are confident in their companies’ three-year outlook, reporting ESG, technology and people as their top priorities.

Seventy six per cent of CEOs at large organizations remain confident in their growth prospects over the next few years. But 76% also said they feel under pressure to ensure the long-term prosperity of their business.

Eighty three per cent remain confident in the Canadian economy.

The owners and c-suite level decision makers at SMBs told KPMG they are bullish in their organizations’ three-year growth prospects (92%) and the Canadian economy (88%). But as many as 86% say they are also feeling the pressure to grow long-term.

"It's not surprising that CEOs are confident after piloting through one of the most-turbulent periods in recent business history, but they acknowledge they're now feeling the growing pressure of leading their organizations," said Benjie Thomas, CEO and senior partner, KPMG in Canada, in a release. "Now they are aggressively looking for ways to improve their company's productivity, optimize revenue, take advantage of new technologies like generative AI, and become cyber-proof, trade-proof and inflation-proof."

The top issues identified by Canadian CEOs that could derail their three-year growth plans are: operational risks, cybersecurity and environmental/climate change. 

Executives identified executing on environmental, social and corporate governance (ESG) strategy as their top operational priority. But only half say they are prepared to withstand the potential scrutiny and expectations of stakeholders and shareholders on ESG.

By contrast, SMB leaders ranked ESG as their fourth operational priority, tied with inflation proofing. Implementing generative AI took the top spot. 

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Conversely, 59% of CEOs at Canada’s biggest companies agree generative AI is a top priority, down from 75% last year, likely reflecting previous investments, KPMG said.

The second most-important operational priority for Canadian and global business leaders alike is their “employee value proposition.”

Employers are evaluating what they can offer employees around career development, work-life balance, compensation, purpose and mission and company culture.

Eighty four per cent of SMBs expect their organization to be impacted by labour market shifts—specifically the number of employees who will retire and the lack of skilled workers available to replace them. 

By contrast, only about a third (28%) of CEOs share similar concerns.