Talent

To understand how the current business climate is shaping CEOs’ thinking, KPMG embarked on the 11th edition of its annual Global CEO Outlook, which features 1,350 CEOs from some of the world’s biggest economies and key industries, of which 400 respondents are from Asia Pacific. The survey is a wide-ranging study that seeks to cut to the core of CEO sentiment regarding the global economy, emerging technological innovations, talent management and the sustainability agenda.

This article looks at the how CEOs in Asia Pacific are rethinking their workforce strategies as their organisations grapple with growing AI use and shifting demographic and labor market trends.

About three-quarters (73 percent) of CEOs in the region agree that upskilling of workforce on AI is a key trend that will impact their organisations’ prosperity over the next three years. In the long term, CEOs are focusing on redesigning career paths to reflect AI collaboration and hiring new talent with AI and tech skills.

Organisations across Asia Pacific have recognised the importance of digitalisation in enhancing productivity and efficiency — and with the arrival of AI, a new approach to workforce management is essential.

Despite fears that AI will retrench many jobs, Asia Pacific organisations don’t appear to be simply replacing their employees with technologies — in fact, 92 percent of CEOs say they expect their headcounts to increase over the next three years, following on from trends in 2024 (90 percent). This data suggests that Asia Pacific leaders still see immense value in their workforce and are looking to deploy new technologies with a people-centric strategy. By blending the human and technological, leaders are priming their organisations to reimagine their entire operating models around the potential of AI.

According to KPMG Asia Pacific CEO Outlook 2025 the age of AI is catalysing widespread shifts in how businesses are approaching their workforce strategy over the next five years. Globally, CEOs agree that workforce AI readiness and upskilling will impact their organisations’ prosperity over the next three years, an observation replicated in Asia Pacific. Seventy percent of executives in the region are concerned about the competition for AI talent, for example.

As such, the vast majority of executives are actively rethinking how their workforces are trained and developed (77 percent), especially those in Australia (84 percent) and Japan (81 percent).

Exhibit 1: AI is reshaping how Asia Pacific CEOs manage their teams

However, given the scale of current talent gaps, companies cannot solely rely on their existing workforces to cope with the immense changes wrought by AI. In Australia, CEOs are bolstering their numbers by hiring new talent with AI and tech capabilities (76 percent), reflecting a commitment to intensifying AI investment. 

Exhibit 2: Training and upskilling are front of mind for Asia Pacific CEOs

While executives are broadly optimistic about the potential benefits of AI, there are anxieties about how these technologies will impact certain roles and processes, as highlighted by findings from KPMG’s 2025 Trust in AI study.¹ Asia Pacific CEOs are not shying away from the reality of how AI will impact existing roles, with 47 percent choosing to openly communicate with employees, especially leaders in China (56 percent).

In India, on the other hand, CEOs are turning to help from external AI experts/ consultants (52 percent) to help them adopt and embrace AI across their workforce. Across the region, 47 percent of CEOs are also proactively investing in reskilling and upskilling programs for affected roles.

Exhibit 3: Asia Pacific CEOs are taking different approaches to helping employees cope with AI

AI isn’t the only issue on the minds of Asia Pacific leaders. From skills gaps (30 percent) to a lack of technical and collaborative skills (29 percent), CEOs are confronted with a constellation of challenges that are deepening amid demographic and labor market shifts.

Throughout the region, societies are undergoing profound changes such as in China, South Korea and Japan which are experiencing ageing at a rapid pace. By 2050, more than a quarter of Asia Pacific’s population will be aged 60 years older.²

The impact of an aging workforce is especially pronounced in Japan, where 61 percent of executives say a greying population is affecting recruitment, retention, and workplace culture — more than double the regional and global average of 26 percent. Additionally, 43 percent of Japanese CEOs are highly concerned about the impacts of retirements on their workforce and the challenges in replacing them.

 Exhibit 4: A range of issues is complicating Asia Pacific workforce management

To counter this, CEOs are doubling down on the potential for AI to strengthen their existing workforces: 79 percent of companies are actively encouraging their employees to experiment with AI, regardless of their background or seniority level.