CFOs and CEOs, facing economic volatility and uncertainty in the second half of 2022 and beyond, are most likely to continue to invest in workforce and talent development, according to a recent Gartner survey.
By contrast, merger and acquisition investment is most likely to face immediate reduction, with Gartner Finance's Vice President Randeep Rathindran stating, "rising interest rates [are] significantly increasing the cost of financing such deals." Despite a robust 2021 for M&A activity, the drop-off in 2022 represents what the report refers to as "a go-to response to reduced operating cash flow," per the report.
Continued investment in workforce and talent development is consistent with recent CFO trends which have placed increasingly greater emphasis on management, retention, and investment.
A more surprising result of the survey revealed that investment in sustainability and environmental impact, often recognized as integral components of ESG, is expected to be high on the chopping block. More than one in three respondents (39%) stated it would be one of the top cuts.
Despite increased emphasis on ESG by company leadership and increasing momentum in corporate and regulatory reform, ESG represents an investment organizations view as a necessary tradeoff. "These kinds of investments still represent a significant upfront cost that lacks an immediate payoff, particularly when times are tough," per the report.
The survey, conducted in June, was comprised of 128 CFOs and CEOs.