CEOs in the UAE are planning a major return to the office over the next three years, according to the latest report published by KPMG. Most (72%) expect employees to return to the office full-time, up from 60% last year. Only 20% envision hybrid working, compared to 27% of CEOs worldwide, while 8% plan to allow fully remote work.
And while most CEOs worldwide (88%) plan to lure employees back to the office with favourable assignments, raises and promotions, many CEOs in the UAE seem prepared to impose mandates requiring employees to return.
Most local leaders (60%) said they were either neutral or not likely to reward in-person workers, implying that on-site work would be expected. This emphasis on returning to office spaces possibly aligns with the collaborative leadership style prevalent among local CEOs, with 92% prioritizing shared management and operational responsibilities, significantly higher than the global average of 72%.
According to the findings of the latest edition of the KPMG UAE CEO Outlook report, virtual meetings may be valuable for shared decision-making. Still, most employees expect more flexibility in their work life. Despite CEO preferences, many experts have declared the five-day office week dead.11 Despite the CEOs’ inclination towards a full five-day office week, experts are declaring the traditional model obsolete.
AI remains a top priority
Over 56% of CEOs in the UAE agreed that AI is a top investment priority, with more than a third viewing AI as a catalyst for profit maximization.
Key benefits cited included detecting fraud and cyberattacks, increasing operational efficiency, and opportunities to create products and enter new markets. However, they don’t expect the benefits to be immediate.
Big Four accountancy firm KPMG said that only 4% of CEOs in the UAE expect to see a return on investment in the next one to three years. A considerable majority (72%) think it will be over five years before AI investments pay off. The UAE has been at the forefront of leveraging generative AI technology.
Despite the enthusiasm for AI, local CEOs express apprehensions regarding its dual nature, one that can both enhance cyber resilience and open new avenues of attack. Only around half (48%) of CEOs in the UAE said their companies were well-prepared for a cyberattack, similar to the 53% worldwide. “While local leaders are enthusiastic about the government’s goal of accelerating adoption of generative AI, they are much more concerned than their global counterparts about the ethics of AI, the costs, and employee adoption,” the report said. In the UAE, 64% of CEOs listed ethics as “very challenging,” compared to just 24% worldwide. 80% also said costs were a major challenge, compared to 56% worldwide, and 84% described employee adoption as “mostly” or “very” challenging.
ESG is the way forward
CEOs in the UAE view ESG as key to building their brand reputation and attracting new talent over the next three years. Nearly two-thirds of respondents (64%) have fully integrated ESG into their businesses as a strategy to create value. However, the vast majority expect it will take several years for these efforts to pay off from a business perspective. Almost half (48%) expect a significant return on ESG investment in three to five years, while another 40% expect it will take five to seven years.
Local leaders recognized serious risks in not meeting ESG targets: 40% of CEOs foresee increased costs or difficulties in raising finance due to non-compliance, compared to 25% globally. Additionally, 28% express concerns about giving competitors an advantage by falling short on ESG commitments. These numbers signalled a more substantial commitment to ESG than in years past. In 2022, only 20% of CEOs in the UAE viewed ESG as key to improving their firms’ financial performance.
UAE CEOs acknowledge the interconnectedness of ESG and financial viability but are wary about meeting reporting standards. Only 28% feel prepared to meet new standards, while 67% express unpreparedness under stakeholder scrutiny. Environmental goals, especially achieving net-zero emissions, have taken a backseat due to other ESG priorities like transparency and governance. However, the UAE remains committed to achieving net-zero emissions by 2050, reinforcing its stance on sustainable growth.
