It’s never too early to speculate. While financial forecasting can be a tricky business, economic events are in motion allowing CFOs to hedge their bets for 2023. The unpredictability of Covid, soaring gas and retail prices, disruptions in the supply chain, and the continuing conflict in Ukraine are just some of the factors universally influencing economic policy.
As North America’s leading recruiter of high-level financial talent, Grayhawk Search has its ear to the ground. Here’s our portrait of 2023, as painted by 2022’s top-tier CFOs:
It may be the word no one wants to hear but in C-suites everywhere, it’s being bandied a lot: recession. According to a recent CNBC–CFO Council survey, more than three-quarters of chief financial officers are expecting one over the first half of next year. The leading cause is, of course, inflation. Even President Biden’s three-part plan to address the issue isn’t deterring 77% of the survey’s respondents from use of the “R” word: Results of Survey.
There’s good reason for it—make that “reasons,” most of them superseding the prospective alleviation of short-term price pressures should the pandemic finally wane. The conflict in Ukraine continues to drive food and energy prices up internationally; housing demand continues to be high; labor shortages are causing a dramatic rise in wages; food and paper costs are gobbling up service industry expenditures.
This daunting situation is yet another reminder of the importance of having the right financial talent in place, one with a clear crystal ball, visionary savvy, and proactive influence; a C-suite talent who can financially architect from a reliable, practical mix of education, experience, analysis, and intuition—put simply, the caliber of talent only a seasoned recruiter, like Grayhawk, can locate and lure.
Okay. We’ve presented the problem. Now for the solution. Here are the financial schematics to which North America’s smarter CFOs are subscribing, as antidote to the bitter medicine the world may well be forced to swallow in the coming year:
Cost reductions – According to a Gartner, Inc. survey of 199 CFOs and senior finance leaders conducted in early May, cost reduction will be the primary form of action as a reaction against the prospect of recession.
That said, this is not a universal contention. 36% of the CFO Council firms polled plan to exercise the antithesis, saying that they are going to build up their spending over the following year. Meanwhile, an even healthier contingent (46%) has plans to hold fast within their company’s present spending scope.
Increased staffing – While a small percentage of CFOs view staff reduction as a necessity, the emaciated nature of the labor force has many in the opposite frame of mind. The majority of companies across North America, currently in hiring mode, intend to stay there. Look for headcounts to increase even as inflation does same.
Investment – According to Gartner’s Finance Technology Innovations Survey, investment in automation is a key weapon against the oncoming phalanx of recession. It’s a bent backed up by Alexander Bant, chief of research in the Gartner Finance practice.
According to Bant, companies who spend on the proper digital investments historically record significantly higher rates of customer retention and satisfaction, as well as a higher average order value. Leading digital companies, Bent adds, are also more likely to achieve above-industry revenue and margin growth. As 2023 nears then, look for aggressive spending on technology, with a particular emphasis on digital investments.
Outliers – While it’s all very good to play it by collective sentiment, any CFO worth their mettle will also demonstrate a keen intuition for free radicals, those silent phenomena capable of upsetting the strategic apple cart. A truly worthy recession-fighting plan should comprise consideration of the following factors, each of which could rearrange the tea leaves. These include the continuing popularity of remote and contract work, the unstoppable rise of online shopping, prospective price wars among major retailers, and the fast-tracking of infrastructure improvements among North America’s leading companies. Any of those ducks in a row and the “R” word may well change from “recession” to “recovery.”
So, ready for the wild ride that will be 2023? More importantly, is your current CFO ready? If not, talk to Grayhawk Search. As the world’s leading Finance Executive Search specialist, Grayhawk is business’s preferred source for the proven, prepared, and prescriptively-minded financial talent you’ll need to strategically anticipate the next economic annum.
Grayhawk Search – Today’s CFO for tomorrow’s challenges.
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