Recruitment and retention worries fall away for Australian CEOs fretting about keeping costs down and new tech

Wrangling artificial intelligence and inflation are among the biggest worries for Australian CEOs, who are bracing for 2025 far less concerned about employee retention and labour shortages than a year ago.

KPMG’s annual “Keeping us up at night” survey revealed 53 per cent of company bosses had digital transformation, and how to get value from it, as their biggest worry heading into the new year.

Defending against and dealing with cyber attacks — the biggest concern in 2024 — fell to second in second place at 42 per cent.

Tech related issues also topped the worry list for the 320 executives, business owners, and managers when surveyed about their worries for the next three to five years.

Finding and creating future growth opportunities came in third over the same period.

Meanwhile, for 2025, concerns regarding staff retention and recruitment fell away meaningfully. Talent concerns were the top CEO woe of 2023, before dropping to second place last year, and down to eighth for 2025.

The survey also revealed concerns regarding the economy had become more prevalent for the year ahead.

Controlling costs was the third biggest challenge heading into 2025 at 39 per cent, an issue the firm’s executive Andrew Yates said was not surprising.

“The high core inflation is also making any immediate interest rate cuts less likely which will be a frustration for many business leaders. Having said that, survey respondents did not indicate rate cuts would see a significant increase in their business investment in 2025.”

KPMG chief economist Brendan Rynne made the case that President-elect Donald Trump’s anticipated tariffs would be inflationary in nature, and could therefore delay the Reserve Bank of Australia’s next moves on rates.

“To the extent a range of economic policies do get implemented that result in price levels for traded goods increasing globally then this will make the pathway for interest rate cuts in Australia more challenging,” he said.

As for issues impacting businesses outside of their immediate sphere, CEOs picked housing availability and affordability.

That was followed by worries regarding skills gaps in sectors such as tech, data and healthcare, then rising geopolitical disruptions.