As we approach the end of 2022, executives’ outlook on the future of the economy for 2023 remains pretty negative. In fact, 83% of CFOs are either currently in a hiring freeze or plan to stop hiring, according to OneSource Virtual’s 2023 CFO Outlook Report.
But with many companies continuing to grow, and the amount of data not slowing down, finance teams can’t afford a drop in their productivity. The OneSource report addresses how CFOs are conducting hiring freezes while simultaneously putting their staff in the best position to remain productive without burning out.
Just over 100 U.S. CFOs were surveyed in mid-October 2022 and asked about topics related to the potential for hiring freezes, how a skills shortage would impact their decision to outsource, and how prepared they feel to support their organization’s growth and scalability over the next year:
The results seem to show a low level of confidence and potential problems for CFOs based on these findings.
In addition to the 83% that said they either have a hiring freeze in place or are preparing for one, 43% of the CFOs surveyed believe they will not be able to focus on bigger strategic projects unless they automate some of their manual processes.
The vast majority (83%) are also concerned about their ability to complete their accounts payable tasks on time, and almost one-third (32%) say their teams are understaffed right now.
“In 2022 we witnessed CFOs’ priorities shift to the workforce coming out of Covid and dealing with the Great Resignation,” said Courtny Cloeter, Chief Revenue Officer at OneSource Virtual. In 2023, a potential recession and skills shortage will see their focus remaining on the workforce, their own departments included.”
All of this seems to point to worrisome trends and inefficient processes, as CFOs are concerned over productivity and keeping up with the workload. However, the report also highlights the actions CFOs are taking in order to deal with these challenges.
CFOs’ Solutions: Automation and Outsourcing
Despite all of the negative outlooks, CFOs are not sitting idly while feeling understaffed and overworked. One of the most important statistics from the survey was that 95% say the skills shortage will impact their decision to outsource certain finance and accounting tasks.
“Although the survey reveals some stark results with 4 in every 5 CFOs looking at implementing a hiring freeze, we also see potential for business growth through 2023 with outsourcing, co-sourcing and automation,” Cloeter said.
Due to hiring freezes, outsourcing is becoming more and more of a necessity, and not just a way to cut costs in certain areas like it used to be. With around one-third of CFOs saying their departments are understaffed, outsourcing is an easy decision.
“Initially, outsourcing was all about operational cost reduction or a fundamental belief that companies should focus on their core business,” said Cloeter. “Today, companies offer co-sourcing services that are truly an extension of a company’s human resources and finance departments.”
Instead of calling it outsourcing (the traditional way of handing over a certain department such as a call center to a third party), many people are coining the term “co-sourcing.”
“Gone are the days of calling a remote call center,” Cloeter said. “With co-sourcing, companies can partner with firms that bring subject matter expertise and applications while working onshore within the customer’s technology platforms. Companies get the best of both worlds in this arrangement.”
The unstable labor market and shaky economy means that outsourcing and co-sourcing have become a much more attractive option for CFOs. Particular tasks can be completed on time and held accountable and there are no long term commitments or additional benefits that need to be given to third parties.
Out of the 95% of the CFOs surveyed who said that skill shortages are likely to impact their decision to outsource tasks, over half (61%) said skill shortages were “very likely” to impact their outsourcing decisions.
The market is in prime condition for outsourcing, and most importantly, outsourcing can free up full time employees time who can use their expertise and skills sets for more analytical work, especially in the finance department.
The other strategic plan that CFOs are putting into place with the impact of hiring freezes is software automation. Manual tasks in the finance department are every CFOs pet peeve, and even outsourcing doesn’t really solve this problem – as it still costs money and needs to be watched over.
This is where automation comes into play. It is also a big focus because there is so much room for improvement, as around half (49%) of CFOs said they are only somewhat automated.
“Companies have invested heavily in technology platforms since pre-Y2K,” said Cloeter. “The recent investments are more around leveraging the power of cloud computing and machine learning. Better, faster, cheaper applications will continue to come to market, and companies will continue to evaluate investments.”
CFOs are looking for technology that can cover two aspects at the same time: Both automating manual tasks and also one that is able to be implemented within current organizational systems.
“What has changed is the ability for cloud and SaaS solutions to plug and play with large-scale ERPs,” said Cloeter. “I see investment and functionality only accelerating in the future as companies look to improve productivity through automation.”
CFO surveys show a grim reality of the financial outlook for 2023. Many companies have stopped hiring, or plan to do so, and many finance teams feel that it will be very difficult to hit their company goals. However, CFOs are turning to outsourcing and automation to keep up with their tasks, and more and more are following suit.