Canadian CEOs are increasingly focused on bringing employees back to the office full-time, says a new report from KPMG.

The report is based on a survey that shows 83% of CEOs now expect a full return of employees to the office within the next three years. That finding marks a significant jump from 55% in 2023. Additionally, 90% of CEOs indicated they are likely to reward employees who consistently work from the office with favourable assignments, promotions, or pay raises, up from 77% last year.

However, small and medium-sized business (SMB) leaders remain more skeptical about a full return to the workplace. Only 20% of SMB leaders anticipate a complete return to the office over the same time frame.

While 85% of SMBs would offer incentives to encourage employees to come in, nearly two-thirds (65%) expect hybrid work models to persist. They recognize that offering flexibility may be critical to attracting and retaining diverse talent essential for driving growth and productivity.

In addition to the push for office attendance, Canadian CEOs are prioritizing their environmental, social, and governance (ESG) strategies, which have widespread commercial real estate implications. Under increased scrutiny from stakeholders and regulators, ESG has become their top operational focus. Yet, only 50% of Canadian CEOs feel ready to meet these heightened expectations—though this level is still higher than the global average of 34%.

In contrast, SMB leaders rank ESG as their fourth priority, tied with inflation-proofing. Instead, SMBs are focusing on implementing generative AI as their top operational goal.

Overall, CEOs are confident about their three-year outlooks, but most (80%) are feeling pressure to deliver on ESG commitments, and find ways to boost their organizations’ productivity.

“It’s not surprising that CEOs are confident after piloting through one of the most-turbulent periods in recent business history, but they acknowledge they’re now feeling the growing pressure of leading their organizations,” says Benjie Thomas, CEO and senior partner for KPMG in Canada.

“Now they are aggressively looking for ways to improve their company’s productivity, optimize revenue, take advantage of new technologies like generative AI, and become cyber-proof, trade-proof and inflation-proof.”

Most CEOs are also confident about the Canadian (89%) and global economies (69%.) By comparison, SMBs have slightly less confidence (78%) than CEOs in the Canadian economy but have more faith (73%) in the global economy.