CEOs expect full return to the office in the next three years

• Company bosses want to set incentives to get employees back into the office
• Confidence in Germany as a business location declines slightly
• Artificial intelligence is top priority for planned investments

Goodbye to the New Normal: The CEOs of the world's largest companies are struggling with home office working and want to see their employees back in the office as much as possible. This is the result of a global survey of 1,325 CEOs of large companies, including 125 company bosses from Germany.* According to the survey, 68 percent of Germany's top decision-makers believe that their employees will return to the office full-time within the next three years. Internationally, 64 percent of the CEOs surveyed believe this. Only one in four respondents, on the other hand, can still imagine hybrid working models and only three percent believe permanently and exclusively in the home office.

In order to achieve the highest possible presence at the workplace, three out of four German CEOs (77 percent) can imagine promoting employees or paying them more salary if they come to the office more often. In this respect, German CEOs are more reserved than their international colleagues (87 per cent).

In international comparison, Germany as a business location has recently made rather negative headlines. German CEOs are also increasingly sceptical about the potential for economic development here. 75 percent of German company leaders - four percentage points less than in 2022 - are confident that Germany will grow as a business location in the next three years. Confidence in one's own company has also declined somewhat. Although 80 percent still expect growth in the next three years, this is ten percentage points less than in the previous year.

Despite the tense geopolitical and economic situation, German CEOs are positive about the earnings outlook and expect to hire more staff. More than every second German company expects annual earnings growth of two and a half percent or more within the next three years. 84 percent of the top managers surveyed also expect their company's workforce to grow within the next three years, with 39 percent expecting an increase in staff of more than five percent. In order to achieve their own growth targets, almost half of the CEOs are considering aggressively tackling the issue of mergers and acquisitions in the medium term.

In addition to M&A activities, German CEOs are currently prioritising investments in generative AI. 76 percent of the participants in Germany want to make funds available here in the short term. As advantages of the new technology, the company bosses name above all increased profitability (26 percent), followed by higher efficiency and productivity through automated processes (21 percent). Expectations of efficiency and productivity in particular are thus significantly higher in an international comparison. 

Despite all the euphoria, top management in this country also sees challenges in the implementation of AI projects. In addition to the implementation costs (66 per cent), almost every second decision-maker criticises access to qualified personnel (49 per cent) and a lack of regulation in this new field of action (49 per cent).

Despite the increasingly polarising discourse, ESG issues are becoming more and more standard in companies. 77 percent of the CEOs of German companies surveyed have fully integrated ESG into their business to generate value - globally, the figure is 69 percent. The majority expect it to take another three to five years before they see a return on their ESG investments. Internationally, these figures are comparable. The complexity of decarbonising supply chains and a lack of internal governance mechanisms to implement the strategy are cited as the biggest hurdles to achieving net zero or further climate targets.

For the KPMG CEO Outlook 2023, 1,325 CEOs of large companies were interviewed worldwide and across sectors in August and September 2023. The participants come from the markets Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the USA. The companies of all CEOs interviewed have annual revenues of at least $500 million and are part of eleven key industries (asset management, automotive, banking, insurance, consumer and retail, energy, infrastructure, life sciences, manufacturing, technology and telecommunications). The 2023 edition is the ninth edition of the KPMG CEO Outlook.

Clemens Reisbeck

Deputy Head Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com