A new global survey reveals that 9 out of 10 CFOs are optimistic about how their companies will perform in 2021, while 8 out of 10 CFOs see global expansion as the path to long-term growth.
The February 2021 survey of chief executive officers, chief financial officers, and other senior finance executives also uncovered changing perceptions about hiring and remote work and how those changes could be helping their global expansion plans.
The survey, conducted by CFO Research, a business unit of Industry Dive, and Globalization Partners, polled 215 senior executives at companies in North America, Asia-Pacific, and Europe/Middle-East/Africa, including the United Kingdom. Most of the companies represented had annual revenues of $1 billion or more.
The survey uncovered three key themes.
The executives’ answers showed optimism despite lingering effects businesses face from the pandemic downturn. Asked about their expectations for 2021, 26% of the surveyed executives said their businesses were still stabilizing or in recovery, yet 93% predicted that their companies would still meet or exceed their adjusted 2021 goals. Only 7% expected to perform below goals and expectations.
Over the long term, one of the driving forces behind the optimistic outlook appeared to be international expansion plans. The survey showed a direct link between optimism and new-country expansions: of the executives who projected their businesses would exceed expectations in 2021, 91% were launching operations into new countries. And 81% of the survey respondents said their long-term growth strategies included expansion into new countries.
Implementing a strategy for global expansion and presence was the second-most-chosen priority for executives in the next 12 to 18 months, eclipsed only by optimizing margins and costs of goods. Introducing new or additional products or services was third, followed by maintaining working capital.
Across the spectrum of rising and declining businesses, the survey respondents’ companies skewed toward growth. Only 1% of the survey respondents said their companies were currently in decline, compared with 40% who said they were in a state of accelerated growth.
The global outlook of the surveyed executives also extended to their workforce hiring and recruiting plans. Asked to describe their hiring strategies over the next 12 to 18 months, 42% of the executives said they wanted to attract new talent that was unbounded by the geographic restrictions of their company’s operating model.
Taking a broader geographic view in the search for talent reflected a high degree of interest by CFOs in tapping into a more cost-effective, global talent pool (a concept favored by 85%) and capturing market share through global expansion (selected by 81%).
Finally, about 83% of executives agreed that a high-caliber, diverse workforce was important to their organizations and its key stakeholders.
For most companies, remote work models will remain in place for at least the next year, according to the survey. Three-quarters of the respondents anticipated operating remote or hybrid workforce models in the next 12 to 18 months, while about one-quarter said they would be operating an on-site workforce.
The executives admitted that remote-work situations forced on them by COVID-19 opened their eyes to some human capital issues. Three-quarters of the executives said the coronavirus pandemic fundamentally altered how they think about hiring and workforce management, and 81% said it fundamentally altered the way they view remote employees or the work-from-
The survey also revealed some interesting differences regionally. Executives from the Asia-Pacific region lead the way in the positive attitudes about their companies’ current states and short-term outlooks and in the aggressiveness of their plans for international expansion.
Optimism was most pronounced for the 58 executives surveyed from North America, with 97% predicting their companies meeting or exceeding goals and expectations in 2021. The 54 executives surveyed from companies in Asia-Pacific (APAC) countries were close behind, at 96%. For the 102 executives from the Europe, Middle East, and Africa region (EMEA), including a large contingent from the United Kingdom, 90% predicted they would meet or exceed their 2021 targets.
The present state of APAC businesses were especially rosy in the eyes of their executives. A little less than half (46%) described their businesses as in a period of accelerated growth, compared with 45% of the EMEA executives and 26% of North Americans. A majority of the North American executives — 70% — reported that their companies were either still stabilizing or focused on business continuity. Half of APAC executives reported being in a similar state and 44% of EMEA executives assessed that their businesses were also still recovering from the pandemic.
On the topic of global expansion, APAC executives were considerably more assertive than their peers in other regions, with 94% planning expansions into new countries as part of their long-term growth strategies. That compared with the 79% of EMEA executives and the 70% of North American executives who indicated global expansion was integral to long-term growth plans.
Strategizing for global expansion was among the top priorities for executives in all three regions. “Implementing a strategy for global expansion and presence” was deemed a top priority in the next 12 to 18 months for 53% of the APAC executives, 39% of the EMEA executives, and 36% of the North American executives.
The number one priority listed by the APAC and North American executives was “optimizing margins and costs of goods or updating the supply chain.” For the EMEA executives, the number one priority was maintaining working capital.
APAC executives indicated a high degree of interest in tapping into a more cost-effective, global talent pool (89%) and capturing market share through global expansion (94%). That compared with 84% and 78%, respectively, of EMEA executives and 81% and 74%, respectively, of executives in North America.
The highest percentage of companies that predicted they would operate with remote or hybrid workforce models in the next 12 to 18 months were those in EMEA: 79%. Nearly three-quarters (74%) of APAC executives and 69% of North American executives predicted remote or hybrid models for their companies over the same period.