Background:
Deloitte’s fourth-quarter 2021 CFO Signals survey aimed to home in on finance chiefs’ most-pressing prerogatives for 2022. Below we elaborate on CFOs’ five priorities for the year, as identified by the survey’s respondents: talent/labor, financial performance, growth, strategy setting and cost management.
1. Talent/labor
Around 61% of survey respondents cited addressing talent/labor gaps and related issues as a priority. In short, CFOs see attracting new talent and mitigating the challenges of return-to-work and hybrid models as one of their biggest responsibilities this year. Corresponding plans may include retaining employees with higher wages or incentives, developing employees’ current skills and offering a better work culture.
“CFOs are laser-focused when it comes to helping their organizations address the significant talent/labor shortages amid the Great Resignation,” said Steve Gallucci, national managing partner for Deloitte LLP’s U.S. CFO Program.
2. Financial performance
Around 43% of respondents plan to improve their companies’ financial performance and boost their companies’ bottom lines through measures such as increasing margins and efficiencies, managing profitability and hitting transformational milestones. Improved pricing is another lever CFOs cited as a means to navigate inflation. Some 76% of CFOs said their organizations would raise prices for a substantial portion of their products and services to offset inflation.
3. Growth
Growth was the third most-frequently cited priority by the survey’s respondents. CFOs intend to focus on generating more revenue, increasing sales, optimizing capital structures, investing in growth opportunities and supporting new product launches within their organization’s risk appetite.
More than three-fourths (79%) of surveyed CFOs plan to allocate or reallocate capital to new business investments in 2022. Some 67% said their firms plan to pursue merger and acquisitions and new venture opportunities. Around 72% indicated they would expand their range of products/services. In addition, 58% said they plan to raise their focus on new markets in North America, while 40% are planning to increase focus on new markets outside North America.
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4. Strategy setting
Strategy development ranked fourth among CFOs respondents’ priorities for the year. Among the corresponding actions they plan to undertake are positioning their organizations for the post-pandemic environment, enhancing processes and operations, preparing for new regulations, undertaking digital transformation and increasing the use of data analytics and AI.
An overwhelming 92% of CFOs reported that their organizations want more automation and technologies embedded in operations, and 34% anticipate they will increase the use of outsourcing for certain operations. Around 41% planned to have a smaller real estate footprint for their organization, while 88% intended to deploy a hybrid work model.
5. Cost management
Some 21% of CFOs consider cost management as among their key priorities for 2022, citing expectations for higher costs of inputs such as talent/labor costs, oil/fuel prices, materials costs, supply chain costs and inflation.
Which risks concern CFOs the most?
In addition to citing their key priorities for 2022, CFOs expressed their biggest worries:
• Talent/labor, particularly managing hiring, retention, attrition, burnout, employee well-being and development, and return-to-work challenges.
• Inflation and supply chain shortages.
• Changes in fiscal policies and government regulations.
• COVID-19 new variants and vaccine mandates.
• Cybersecurity risks.
• Strategy execution and the pace of digitalization and innovation.
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