Workforce Management

83% of CFOs Plan to Implement Hiring Freezes: Weekly Stat

Faced with a skills shortage and a looming recession, CFOs said automation and outsourcing are critical for the finance team.
83% of CFOs Plan to Implement Hiring Freezes: Weekly Stat
Photo: pcess609

As Q4 and 2022 approaches its final weeks, CFO outlook on the overall economy remains low. Alongside large-scale hiring freezes being forecasted in OneSource Virtual’s 2023 CFO Outlook Report, data shows CFOs are putting their staff in the best position to remain productive and not feel overworked, even as their teams pause hiring. Many are implementing automation technology in areas surrounding remedial finance and accounting tasks, freeing up labor for work on other projects that can counteract economic woes by driving growth. 

Courtny Cloeter, chief revenue officer of OneSource Virtual, talked to CFO about how finance leaders can both implement and allocate their way into the best possible position for what is to come. According to Cloeter, it comes down to a balance of identifying the most impactful place of automation while creating the best work environment for the employees who survive freezes and cuts. 

Earned Wage Access (EWA) is a fintech offering that allows employees access to their wages prior to payday. Nearly all respondents (95%) said they are either implementing EWA or are considering doing so. Despite only 47% of respondents currently offering EWA to their employees, data shows the idea is becoming entrenched in the corporate finance landscape as a way to add employee perks and increase retention.

Courtny Cloeter headshot.jpg

  Courtny Cloeter

“Employers are looking for meaningful ways to help their employees, and new offerings like EWA go a long way in helping to remove stress and retain their employees,” Cloeter said. 

“Companies can’t afford to absorb 10% wage inflation annually or meaningfully pass along these costs to their customers,” said Cloeter, when asked about employee morale during hiring freezes. “Companies have turned to programs like financial wellness to help them through this difficult period.”

While the idea stems from good faith and does indeed give employees access to their money in a pinch, some may be cautious, as the offerings bear some resemblance to the now illegal payday loan industry. With fees associated with these kinds of products, the Consumer Financial Protection Bureau has already put forth opinions defining the differences between an EWA product and a payday loan. 

Outsourcing is Becoming “Co-Sourcing”

In the process of implementation of hiring freezes, data shows CFOs are turning to outsourcing as a viable second option, should workloads increase and hiring isn’t permitted. With nearly a third (32%) of CFOs telling OneSource Virtual their teams are understaffed right now, outsourcing for teams in need of assistance may pay major dividends as 2023 comes to fruition. 

“Initially, outsourcing was all about operational cost reduction or a fundamental belief that companies should focus on their core business,” said Cloeter. “Today, companies offer co-sourcing services that are truly an extension of a company’s human resources and finance departments.”

Outsourcing or co-sourcing can not only provide assistance without commitment to an employee, but it can free up employees whose skill sets can be used elsewhere. According to the report, 74% of surveyed CFOs identified “extra capacity” as the top reason for outsourcing their finance and accounting tasks.

“Gone are the days of calling a remote call center,” Cloeter said. “With co-sourcing, companies can partner with firms that bring subject matter expertise and applications while working onshore within the customer’s technology platforms. Companies get the best of both worlds in this arrangement.”

Limping labor markets have also resulted in outsourcing becoming a more viable option for CFOs who need particular tasks completed accurately on a regular basis. Ninety-five percent of those surveyed said skill shortages are likely to impact their decision to outsource tasks like invoice processing and payments. Out of that group, 61% said skill shortages were “very likely” to impact their outsourcing decisions. 

Automation and Growth Projections 

As strategies around minimizing the impact of hiring freezes continue to develop, the automation of remedial tasks through software is on the mind of financial executives from across the board. While nearly all (95%) of CFOs told surveyors their finance function was automated, levels of automation varied significantly. Of those who are using automation, over half (49%) said they were only somewhat automated. 

“Companies have invested heavily in technology platforms since pre-Y2K,” said Cloeter. “The recent investments are more around leveraging the power of cloud computing and machine learning. Better, faster, cheaper applications will continue to come to market, and companies will continue to evaluate investments.”

According to the revenue officer, the value of technology for CFOs has not only been determined by the impact of its function but by its implementation ability within current organizational systems. 

“What has changed is the ability for cloud and SaaS solutions to plug and play with large-scale ERPs,” said Cloeter. “I see investment and functionality only accelerating in the future as companies look to improve productivity through automation.”

Both technology and hiring are having a serious impact on growth projections. The impact of hiring freezes is still causing more than a third (37%) of CFOs to believe they will not be able to match their growth ambitions. When it comes to focusing more on strategic tasks and other projects, 43% of CFOs said they would not be able to do it without automation of their accounts payable duties. 

According to Cloeter, CFOs need to be ready to make changes while properly narrowing expectations. “Revenue growth is key to most problems, but it can’t come at any cost,” said Cloeter. “Some companies will reduce staff and operations, leading to increased client churn and revenue declines. But what’s really happening is that the [executive’s] focus is diluted. [They’re] chasing revenue dreams that may never materialize.”