During the pandemic, talent management and development were pushed down the list of priorities of CFOs. All attention and energies were focussed on short-term survival and forecasting cash flows, and only about seven per cent of chief financial officers (CFOs) reported implementing talent-management strategies. However, for more than 30 per cent of the CFOs surveyed by Stanton Chase for its CFO Survey Report 2021, talent will be priority in 2021. That means, CFOs are optimistic about recovery and are preparing for it, with one-third of those surveyed listing talent management as a priority in 2021.
While many CFOs had to make tough decisions in 2020 in the short term, which included downsizing too, they faced the risk of losing key people who could actually lead the recovery plans for organisations this year. Now, CFOs see the next several years as very crucial for rebalancing and reconfiguring the business. They are also very positive and hopeful about economic activity and revenues returning to pre-COVID levels.
Priorities for next five years
Till 2025, the top three important priorities for CFOs will be the business model, technology and talent management. A whopping 86 per cent of the CFOs felt the need to adapt their existing business model to thrive within the future economy. About 58 per cent said investment in emerging technologies and systems will be one of the main focus areas. About 54 per cent said they would concentrate on talent management strategies and practices, that is, recruitment, retention, and succession planning.
What is surprising is, only 17 per cent of the CFOs are prioritising a shift to the remote-working environment in the near future, even though most leaders may have already managed to facilitate and encourage remote work. Maximum attention will, it seems, be paid to new business models, technology, and people. Many CFOs do realise the significance of frequent and regular communication with their remote teams to ensure continued engagement “through a period of extended uncertainty”.
Environmental sustainability, social responsibility
With 2020 being all about conserving cash and preserving shareholder value, little or no attention was paid to environmental sustainability and social responsibility. In the year ahead, these will continue to remain low on the list of priorities for CFOs. Less than 30 per cent CFOS ranked environmental, social, and governance (ESG) as a priority. Only 13 per cent of CFOs from private equity and venture-backed firms saw environmental sustainability and social responsibility as a priority, compared to just over one-third of public company CFOs.
With increased attention from shareholders and activist investors in ESG issues, the focus may return.
Creating value internally
The focus of CFOs will remain on developing and executing strategies to create value within their organisations. While technology and digital transformation will continue to be important, they have declined in ranking. Over 68 per cent of CFOs are of the opinion that they created value through financial stewardship and risk management while 59 per cent felt they did so via business and operational leadership. Surprisingly, 20 per cent less CFOs said they have taken a leadership role in driving and executing corporate strategy since 2017.
Additional responsibilities of CFOs
The role of the CFOs has expanded over the last one year. In addition to their traditional responsibilities, CFOs had to focus on managing costs and liquidity, supporting strategic changes, leadership, and management, even while keeping an eye on communication with key stakeholders and providing a sense of stability.