24th CEO Survey—Government and public sector insights
Government and public sector organizations came under intense pressure during the pandemic as they worked to protect the health of Canadians and Canadian businesses. They remain optimistic despite the looming fiscal constraints expected to arise as governments shift their focus from recovery to reining in significant debt increases.
At a glance
- More than half of government and public sector leaders are extremely concerned about uncertain economic growth—likely given the increasing debt burden coming out of the pandemic.
- There’s no end in sight for digital initiatives, with most government and public sector organizations expecting to increase their investments in digital transformation over the next three years.
- Almost three-quarters of public sector organizations expect to increase their headcount this year, as demand for government services remains very high.
Be optimistic, but prepare for the challenges ahead
COVID-19 put government and public sector organizations to the test, forcing them to react quickly to an ever-changing situation to protect the well-being of Canadians and to ensure the seamless delivery of critical public services. Governments across all levels have demonstrated the art of the possible—embracing collaboration and innovation to support Canadians and businesses through an incredibly challenging and unprecedented time.
Looking ahead, government and public sector organizations need to build on the momentum they’ve generated over the past sixteen months. With fiscal constraint expected to be a major theme as governments work to address pandemic-related debt, the public sector organizations that will have the greatest impact will be the ones that remain focused on optimizing their operations, building their internal digital capabilities and enabling Canadians to embrace online and alternative service channels.
As we come out of the pandemic, there’s no doubt the future looks bright for Canada, but that doesn’t mean public sector leaders can let down their guard. In our 24th CEO Survey—Government and public sector insights, we put a spotlight on three critical activities government and public sector leaders should consider so they can embrace the future with confidence: prepare to take on tomorrow, rethink your operations strategy and bring your workforce of the future into focus.
Economic outlook: Prepare to take on tomorrow
With the light at the end of the pandemic tunnel nearing, there’s optimism that the Canadian economy is well positioned to recover. Over 80% of the Canadian CEOs who participated in our CEO Survey cited that they are confident in their organization’s prospects for revenue growth over the next 12 months—with 36% saying they were very confident.
But only 7% of public sector leaders are very confident their budgets will grow. They know they need to be ready for the inevitable repercussions of the pandemic, including the challenges likely to come as governments turn their attention from stimulating the economy to reigning in skyrocketing debt.
Public sector leaders need to act now to make sure they’re well-prepared to take on tomorrow. This means conducting economic scenario planning—developing “what if?” scenarios to understand how different funding scenarios might affect their organization and workforce. Based on the outcomes of these exercises, organizations can identify and evaluate cost restructuring options that are best aligned to their future vision.
%
of government leaders are extremely concerned about uncertain economic growth (vs. 30% of Canadian CEOs across sectors).
Owen Taylor
National Government & Public Sector Leader
PwC Canada
“Attention is shifting from how to support Canadians and Canadian businesses to defining what things will look like when we get through this. The reality is that current levels of spending can’t be sustained forever. Government and public sector organizations will need to look at reducing expenditures and optimizing how they operate so that they can become more efficient and pay down the debt incurred as a result of the pandemic.”
Be built for change: Rethink your operations strategy
COVID-19 put a spotlight on the importance of digital channels, accelerating the willingness of citizens to interact with the government online and driving public servants to see how efficient they can be when they don’t need to deal with paper-based processes. The pandemic also showcased how quickly government organizations can adapt and change when given no other option.
Canadian public sector leaders want to capitalize on these shifting trends and mindsets. Over the next year, 70% plan to improve their operational efficiencies, while 40% plan to collaborate with startups or entrepreneurs. All respondents (100%) also plan to increase their focus on managing systemic risk and low-probability/high-impact events.
Coming out of this intense period of change, government and public sector organizations have an opportunity to be bold—to become leaders, not laggards. This means fundamentally rethinking their operations strategy based on a clear vision of what they want to be in the future—from how they work and the value they provide to how they engage with citizens. Doing so will allow them to prioritize the change activities that matter most and that provide the greatest amount of value.
Moving forward, government and public sector organizations need to continue to harness the lessons they’ve learned from making rapid changes in the face of COVID-19—such as the usefulness of identifying shorter timelines, using agile team structures and forging innovative partnerships with business and industry.
%
of government leaders plan to increase investment in digital transformation over the next three years (vs. 71% of Canadian CEOs across sectors).
“We’ve proven through the pandemic that there are many benefits to digital services, even in sectors that have been very resistant to change. This has led to major advances in people accepting virtual services where previously they couldn’t wrap their minds around them. This changed mindset is an incredible opportunity for the government and public sector—if we can keep the momentum going.”
Bring your workforce of the future into focus
COVID-19 drove many organizations to accelerate their digital transformation activities, particularly in the public sector, where many organizations weren’t equipped for such a radical shift to remote work. For many public sector leaders, workforce management became critical: 47% increased their headcount over the last twelve months, while 73% expect to increase their headcount this year.
Coming out of the pandemic, government and public sector organizations need to capitalize on Canadians’ enhanced awareness of the value of public services and the increasing interest in public service work.
Faced with potential post-pandemic talent attrition, an aging workforce and looming fiscal constraints that could limit headcount increases, government and public sector organizations need to act quickly to bring their workforce of the future into focus. They can do this by redefining their workforce strategy so that it fully aligns with their future vision, while considering potential limitations.
The organizations that will be the most successful will be the ones able to keep the change momentum going among their people—using it to drive continued digitalization of services, digital upskilling and a more flexible and agile workforce.
%
of government leaders are focused on the health and well-being of their workforce (vs. 34% of Canadian CEOs across sectors).
“When Canadians saw the scale to which the government had to step up to help manage the economy, maintain services and ensure that people wouldn’t be homeless or unable to feed themselves, it made the government’s value and importance far more visible and real. I think that will be a significant benefit in terms of the quality of the people that will be attracted to work in the public service in the future."
Questions to consider
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