2022 was another challenging year for businesses worldwide. While some of the old challenges of 2020 and 2021 are still lingering, this year brought a list of new difficulties as well.
For CFOs, 2023 will be a challenge not only in their direct role as head of finance, but also in how they help set the budget and tone for the rest of the company. Here are 5 of the biggest challenges that CFOs face in the upcoming year and how they can help lead the company in the right direction.
While this isn’t a new concept, inflation holds the key for many of the other challenges, and what happens with inflation will influence the economy. If inflation rises or stays the same, the supply chain could continue to be unstable, market uncertainty will remain high, and employees will justifiably ask for higher salaries.
All of this will affect prices and global markets. While CFOs don’t have control over inflation, it is an important metric to follow heading into 2023, and being prepared can help negate many of the effects of inflation.
2) Flexible Workplace
One perk leftover from the pandemic that many employees are not willing to part with is the flexible workforce. While management at some companies are fighting this trend and want their employees back full time at the office, this probably isn’t a smart move for a few reasons.
To begin with, most companies still allow a flexible workplace, so a company that pushes for its employees to come back, could be a big enough reason for its workers to start looking elsewhere. Another reason is that this market downturn is unique in that employees are still in the driver's seat because of the talent shortage and large number of job openings per job seeker. Therefore instead of fighting the flexible workforce, CFOs and management should embrace it as a perk for employees to stay,, or even as a way to fill that talent shortage by hiring remotely.
3) Global Talent Shortage
As mentioned above, the global talent shortage is a huge challenge to the markets in 2023 and beyond. A Korn Ferry study estimated that by 2030, the global human talent shortage will reach 85 million people!
As a result, companies will need to be creative in finding talent and providing incentives and growth opportunities to keep existing employees. One of the best solutions for the finance department is automation, and there are a large number of excellent planning and budgeting software that can automate much of the manual work. Staying ahead is key here as waiting until the global shortage is widespread will make it harder to integrate solutions, whether it be automation or other human resources solutions.
4) Keeping “human” in Human Resources
The rise of automation, whether it be due to having no other choice or improving company processes, means that employees will have more time to solve problems that technology can’t. In other words, “human skills”, such as creativity, negotiation, initiatives, business partnering, and social influence just to name a few.
Luckily for everyone involved, this helps advance both parties’ interests. CFOs and managers want to automate manual work and let their employees take care of skilled problems, while employees want to be more involved in decision making and have a more dynamic skill set. Overall, this should be one of the trends that CFOs look into the most for 2023, as everyone gains from these benefits and it will help prepare for the global talent shortages as well.
5) Well being
Part of the work from home improvements from the pandemic include an increased focus on well being and wellness. The combination of increased time with family and more time at home for self reflection caused many people to rethink their careers and how it interacts with their health. Another Korn Ferry study shows that a full 89% of professionals say they have experienced burnout in the past two years, and 80% of them said they are more burned out now than at the start of the pandemic.
For management, this is a difficult one to balance as many leaders are burned out themselves, while a large percentage are switching jobs at record rates. Employee well- being involves the delicate balance of all the other challenges as well.
Companies need to find the balance that works best for their employees. Working from the office too much can cause burnout while working too much from home can cause a lack of human connection and direction. Giving extra time off and increased perks for keeping employees is great, but CFOs can’t forget that there are difficult times in the economy and this is not always an option for every company.
CFOs will need to help lead the discussion on ways to support employees in their well being and create a sense of integration and belonging for remote staff. A Fortune study shows that 66% of companies are working to better support mental well being, and this will be key in keeping employees happy and productive.
2023 will be a tough year for CFOs as the amount of challenges and complications are growing. The key to solving these challenges will be a balance:
Attracting and keeping employees without being unrealistic with the budget.
Automating manual work (especially in the finance department) so that employees can focus on the skills that they want to and are meant to do.
Creating a flexible workplace without harming the quality of work and sense of belonging and interaction.
Watching inflation and how it will affect all of these factors in 2023 and beyond.