Dive Brief:

• While CFOs and other financial leaders are still concerned about inflation, many remain optimistic regarding their ability to meet future goals and growth, a recent survey of 180 executives with senior finance titles found.
• Yet inflation still remains a top worry among executives even amid their optimism, the CFO Insights on Inflation, Workforce Challenges and Future Plans survey found. Financial leaders looking to strengthen their organizations’ economic position may slow down hiring as well as implement digital transformation initiatives in response, a survey conducted by CFO.com found. 
• Seventy-two percent of financial leaders agreed or “somewhat agreed” that they faced critical hiring needs for the second half of the year, despite 17% pointing to a slowdown in hiring or a hiring freeze as a potential response against inflationary pressures.

Dive Insight:

The majority of financial executives — 86% — still expect to be able to meet or exceed business plans they established at the start of the year despite continuing inflation. Twenty-nine percent said they were building out business resiliency, while less than 3% of respondents stated their business was in decline.

An additional 37% of financial executives reported their organizations were experiencing accelerated growth, according to the survey, which was conducted from July 8 until July 14, before reports that inflation slowed.

The consumer price index (CPI) rose 8.5% in July, according to the U.S. Bureau of Labor Statistics (BLS), compared with a 9.1% increase in June.

CFOs are still keeping a close eye on inflationary pressures, however. While 72% of financial leaders expect to meet their enterprise values goals in the second half of the year, the same percent also believe inflation will have a “somewhat negative” effect on growth. Forty-three percent of executives surveyed expect this negative effect to last for at least two years.

Financial executives are taking the expected steps to combat inflation, with 60% of respondents moving to cut costs. Meanwhile, 56% of such leaders report they are tipping up prices for their end customer, a balancing act that is proving challenging for many.

“Customers are expecting price increases, but we are having difficulty making the moves required quickly enough to mitigate the rising costs,” wrote one financial executive in survey comments.

CFOs have continued to confront mixed economic signals throughout the past few months, with a decline in gasoline prices bolstering consumer confidence even as home prices rise. The Federal Reserve is also likely to commit to future rate hikes to clamp down on inflation, further complicating the economic environment.

Many financial leaders are considering other steps that could help to safeguard their organizations against negative economic developments, therefore, including potentially slowing or eliminating hiring talent. This is despite the fact that a majority of respondents also agreed their organizations will encounter critical hiring needs during the second half of the year, per the survey.

Job openings and the rate of hiring were little changed in July compared with June figures, according to data released Tuesday by the BLS. Job openings increased from 11 million in June to 11.2 million in July. The 6.4 million in hiring during the month was not significantly different from the June level.

Financial executives noted numerous challenges regarding talent acquisition at their firms, including large-scale changes to the overall hiring landscape and “unrealistic expectations” from job candidates that “employers should give in to every request for flexibility and pay top dollar for talent,” per one survey comment.

Data analysis and accounting skills were cited as the top skills most sought after when it came to finding employees for their financial departments, the study found.

CFOs facing a tight labor market are also moving forward with digital acceleration initiatives — 11% of executives pointed to doing so as a response to inflation. The current state of digital transformation was mixed, with 31% of executives noting they had a digital “roadmap” in place, while 22% said they were currently implementing such initiatives.

Another 22% of financial executives said their businesses are lagging in adopting new technology.

Digitizing key processes or tapping tools such as automation could help to solve both cost, talent acquisition and supply chain woes for financial executives, notably, with accounts payable and accounts receivable processes coming in as the most likely to be digitized or automated within the next 12 months.

Supply chain challenges remained the second great issue facing many financial leaders aside from inflation, with swinging prices and hiring problems further contributing to operational pressure for many businesses, respondents commented.  

Forty-five percent of executives agreed implementing the latest technologies would drive value across their organizations.

CFO.com is owned by Industry Dive. It is a sister publication to CFO Dive.