Whether it is technology, logistics, hiring, or inflation, the intricacies of today’s economic climate are impacting the daily lives of chief financial officers. In the wake of CFO’s recently published annual survey — CFO Insights on Inflation, Workforce Challenges, and Future Plans — we peel back the layers of what is most challenging to today’s CFO in 2022.
1. CFOs Believe Inflation’s Negative Impacts On the Economy Will Last Two Years or Less
Almost half (42%) of respondents said negative impacts from inflation will last up to only last two years, while nearly a quarter of respondents (23%) said it would only last a year. CFOs across the board believe inflation will have a negative impact in the short term, but few are betting it will be as disruptive come midway through the decade.
Despite the Bureau of Labor Statistics (BLS) having reported the Consumer Price Index (CPI) rising steadily month to month, CPI went unchanged in July for the first time this year — a sign rapid inflation may be starting to slow down.
2. Despite Strong Need for Staff, CFOs May Halt Hiring
Among CFOs that shared potential inflation-induced cutbacks, the most popular proposal was a cutback of new hiring (17%), despite 72% of respondents also saying their companies are facing critical hiring needs in the second half of 2022.
According to the BLS, financial manager positions will grow at a much faster than average rate of 17%, adding 118,000 jobs under CFOs to support them as their role is demanding more FP&A in the C-suite.
3. Due to Supply Chain Issues, CFOs are Investing in Operations
With supply chain problems still looming, CFOs are looking to invest in new ways to streamline operations. Nearly half (46%) of CFOs surveyed said capital will be allocated to improving this part of their organizations. Beating out sales, marketing, IT, and HR combined, it’s clear CFOs across the board are looking to tackle logistical issues over all else by funding new ways to improve their processes.
“We have been unable to ship products due to gaps in our supply chain,” said one respondent. “This has led to us having to manage cash much more stringently.”
“Supply chain issues and inflation are causing two major issues: We can’t promise a delivery date for our products, and we can’t commit to a price, since our suppliers can’t commit to either of those,” said another respondent. “Add to that the challenges of hiring and retaining staff, especially in the skilled trades, and we are struggling to provide the excellent customer service for which we are known.”
4. Nearly a Quarter of CFOs Say They Lag on Tech Integration
Nearly a quarter of respondents (22%) said their organizations were lagging in technology integration. A combined 31% said their organizations had a roadmap of tech-based solution implementation, while the majority of respondents' answers (43%) said their organizations were already implementing or actively enhancing their technology suites.
While most CFOs agree leveraging technology to track accounting-related tasks can benefit their business in some way, a significant number of respondents (24%) disagreed that tech would drive value across their organization by eliminating manual, error-prone processes. It’s clear the value is in the eye of the beholder when it comes to a specific type of technology being deemed useful to an organization.
While some CFOs continue to lag, those that embrace technology are doing so at unprecedented levels. A recent survey by Gartner found that digital acceleration was the top spending priority for CFOs over the next twelve months, prioritizing back office automation with technology.
“Automating back-office workflows is a key to achieving efficiency gains across a number of areas including accounts payable, accounts receivable, and internal IT services, such as helpdesk support,” said Randeep Rathindran, vice president, research in the Gartner Finance Practice.
“In a cash-constrained environment, where margins are under pressure, the urgency to improve productivity in these areas is heightened,” he said.
5. Almost All CFOs are Seeking Data-Driven Hires for Accounting and Data Analysis Tasks
A vast majority (92%) of respondents said accounting and data analysis are the most important roles for finance team hires. These two traits were the most sought after by far, beating out qualities such as leadership, industry knowledge, and product management combined. As CFOs continue to push to be more hands-on in the C-suite with FP&A, they’re leaving their data-driven and bookkeeping duties up to their staff.
These staff members, likely those who pursue accounting as a profession, should be available down the line, according to the BLS. As many as 96,000 accounting jobs will be added by 2030 according to the bureau, while less versatile roles like budget analyst positions are beginning to halt in growth, with only 2,500 positions being expected to be added by 2030.
The CFO survey was conducted between July 8, 2022, and July 14, 2022. A total of 180 readers participated in the survey, including 115 CFOs.