Strategy

CFOs Most Concerned About These Internal and External Risks

CFOs are increasingly concerned about political and policy uncertainty, while internally, CFOs worry about talent shortages.

Though perceptions of the North American economy remain strong, CFOs are voicing their concerns about the uncertain paths forward for tax reform, health care reform, and trade policy. As a result of this external risk, CFOs are spending considerably more time staying abreast of global economic and policy developments than in years past.

Internally, CFOs are in no way immune to the talent gap and are increasingly focused on attracting and retaining talent. CFOs are stepping into the global war on talent, with a majority citing talent acquisition and retention as a top worry.

Each quarter (since 2Q10), Deloitte’s CFO Signals has tracked the thinking and actions of CFOs representing many of North America’s largest and most influential companies. The election appears to have left CFOs very optimistic—with the 1Q17 survey registering the sharpest uptick in sentiment in its seven-year history, and with several key growth metrics showing considerable strength. Most of this has occurred amid rising political turmoil, however, and CFOs appear to be concerned.

Sandy Cockrell, Deloitte’s Global CFO Program Leader, shared, “As a CFO when you are trying to forecast, it’s not going to be that long before you’re beginning to do budget and planning for 2018 and there’s this total uncertainty about what rates will be or what our international tax regime will look like in terms of repatriated money. That’s really what’s driven up this concern around policy.”

Talent concerns have been near the top of CFOs’ most worrisome internal risks for several years, and they easily top the list again this quarter. While recent talent concerns have been around employee morale and engagement, this quarter’s worries were focused on difficulties in securing and keeping key talent.

It’s imperative that the data companies rely on is forward-looking and predictive in nature, as opposed to interpolated. This necessitates the hiring of individuals with different pedigrees than the traditional finance person.

According to Cockrell, “What we’re seeing in FP&A is a much different type of skill set being recruited and deployed and these typically don’t tend to be people who came up in a controllership position or in functional parts of finance. These are the data scientists, people with PhDs in mathematics. It’s an entirely different type of person because they’ve been trained to use these advanced technologies and tools and they really approach problem solving in different ways. What we’re seeing is the pedigrees and complexion of finance organizations changing dramatically as it adapts to new technologies and the ability to have different processing. The finance organization will become much more diverse in terms of skill set.”