DECEMBER 13, 2022
As 2023 approaches, executives are grappling with economic uncertainty and preparing for the possibility of a recession. Chief Financial Officers are particularly challenged with how to drive growth while battling economic headwinds. In a recent community pulse survey, we asked C-level executives about the impact of the state of the economy on their businesses and how they plan to navigate these pressures in 2023.
Here are a few thoughts from the CFO community on the state of the economy.
Navigating Inflation in 2023
Across the C-suite, inflation, rising wages and supply chain issues are the top economic factors impacting business, with almost all CFO survey respondents stating inflation as an area of concern.
One CFO shared their expectations for 2023 and how they plan to navigate these issues, stating:
“Expect a rocky start to the year as inflation and rising interest rates cut into consumer spending, which is likely to contribute to weakening end markets and a slowdown in job openings. While we don't anticipate cutting into spending associated with long-term strategic initiatives, focus will be put on curtailing near-term spending as the combination of inflationary cost pressures and a stagnant or weakening top-line drive less than desired financial results.”
CFOs’ Economic Outlook
As CFOs have been enduring economic turbulence for years, one questioned, “How much economic damage will be done, and how long will it take to recover?” We asked the community their thoughts on this, and 60% believe it will recover in the next one to two years. A quarter of respondents shared that they believe it will recover in less than one year, and 16% believe it will take more than two years to recover.
Despite unknowns, CFOs have a relatively optimistic outlook of the future. Thirty-six percent of respondents have a positive or very positive outlook for 2023, while another 36% have neutral feelings about the upcoming year. CFOs have been preparing their businesses to thrive during disruption, and one CFO commented how scenario planning will continue to be a priority for them next year to improve their responsiveness while the economy stabilizes.
A Focus on Talent
We asked CFOs what is top of mind for them going into 2023, and while rising costs and a recession were frequently named, the talent shortage was mentioned by nearly every respondent. This corresponds to findings from our community pulse survey on the talent crisis from this past summer, where two-thirds of C-level executives stated they believe talent will still be an issue if a recession is formally declared. Here are some of their comments:
With labor wage pressure and lack of available talent - what does this recession look like?”
Rising costs in the labor market, in particular, and lack of qualified workers.”
Adding staff to handle growth, and then slamming on the brakes at some point in 2023.”
by CFOs, for CFOs
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