- Risks relating to labor costs, talent shortages and concerns over inflation topped the list of worries leading into 2024 for CFOs, according to a survey by global consulting firm Protiviti and North Carolina State University.
- Concerns over attracting and retaining talent won out for finance chiefs over those posed by economic uncertainty and technology’s impact, with CFOs ranking talent as the main risk facing them in the new year followed by economic uncertainty in second place. Despite the rise of technologies such as generative artifical intelligence, labor remains top of mind for executives, the survey found, though emerging technologies has also widely changed the way businesses need to think about their future labor needs — the technology represents the widest threat to white-collar jobs which deal with data entry or related tasks AI could potentially replace, William Lee, chief economist for the Milken Institute said said during a recent panel on the survey results.
- “The most in demand workers are really blue collar workers like the Amazon warehouse worker,” Lee said. Such warehouse workers are no longer “the guy who just drives the forklift. It's the guy who's running the computer console…or the guy who's dispatching the self-driving truck that's going from point A to point B on the highway,” he said.
Talent was cited as the second-highest risk facing executives both for 2024 and in a decade’s time in 2034, according to the Protiviti survey — coming in under inflationary pressures for 2024 and cyber threats for 2034. Overall, the top two risks on the minds of all executives surveyed going into the new year were economic uncertainty and technology’s impact, the 12th annual Executive Perspectives on Top Risks for 2024 and 2034 published Thursday found.
Shortages of top talent have occupied the minds of CFOs for the past year, with executives facing a tight labor market and rising pricing pressures which are squeezing company profit margins. Finance chiefs are notably facing a lack of skilled accountants in their own departments, increasing the workload and pressures on existing employees, CFO Dive previously reported.
Looking forward to 2034, executives also identified the adoption of digital technologies which require skills in rare supply and the rapid speed of disruptive technologies as top five risks, the survey found — coming in at the third and fourth highest risks for CFOs in that year, respectively.
The impact of new technologies upon the labor force is a key question facing today’s executives; the rapid adoption of generative AI — such as OpenAI’s ChatGPT tool, which celebrated its one-year anniversary in late November — made 2023 something of a “catch-up” year for corporate businesses when it comes to technology integration, Christine Livingston, global leader, artificial intelligence services for Protiviti said.
Companies are “trying to figure out, what is this technology? How should I be using it?” Livingston said. “They now see it as necessary to their competitive differentiation.”
For CFOs, this makes greater collaboration with their technology counterparts in the C-suite, such as chief strategy or chief digital officers, critically important, members of the panel said in response to questions. The finance chief is “often the first point of contact for any type of disclosure requirements,” Lee said — a critical concern as potential regulations surrounding cybersecurity and AI governance could come into greater play.
The CFO is “probably going to have to start getting along with their technology partners to understand the implications to the overall enterprise,” Sameer Ansari, global leader, security and privacy practice, technology consulting for Protiviti said of how executives will need to understand emerging cybersecurity practices and regulations.
CFOs highlighted inflation as the second-highest risk for 2024, according to the survey, putting them in good company with their executive fellows: Of the 10 executive positions surveyed, only chief strategy or chief innovation officers and chief data or digital officers did not point to the economy as a top five risk for 2024.
That inflation retains a prominent place in executives’ minds moving into the new year is no surprise; inflation is “one of the few things in the universe that everyone agrees is a bad thing,” Lee said.
Companies were left scrambling to shift their business models to survive in a post-COVID-19 world, Lee said. This led to imbalances in supply chains globally, among other factors which pushed up inflation, leaving worries over economic uncertainty still sharp for many executives.
CFOs still pointed to changes in the interest rate environment as a risk for 2024, though finance chiefs were actually the executives most optimistic about the new year among their fellows — rating nine of the 36 risks considered in the survey at the “less significant impact level,” Protiviti said.
Light has begun to break into the murky economic environment for some experts recently; a recent study by the National Association for Business Economics found that three out of four respondents put the odds of a coming recession at 50%, for example. Inflation will continue to cool during the next 12 months in tandem with the labor market, giving credence to forecasts that the Federal Reserve will be able to achieve a so-called “soft landing,” CFO Dive previously reported.
The survey included responses from more than 1,100 board members and C-suite executives worldwide.