Quick Read

  • On May 11, the federal COVID-19 public health emergency officially came to an end.
  • After more than three years of disruption, our data shows new concerns have emerged, best-in-class practices have changed, and spending plans are altered.
  • There are four key areas where C-suite strategies have shifted.

Given the official “end” of the pandemic phase of COVID-19, we decided to check the data to see how sentiment and priorities have shifted — and stayed the same — among executives.

To do that, we dug into the last four years of quarterly NetSuite surveys and compared findings to the data provided by the Q2 2023 CFO.com survey, fielded by Wakefield Research and sponsored by Oracle NetSuite.

Here’s what jumped out at us.

1. Trending from Talent to Technology

Talent has been a prevailing concern throughout the past several years. However, thoughts on how to handle it have shifted significantly. In the Winter 2020 Outlook Survey fielded at the end of 2019, finance executives cited the talent shortage as their top macroeconomic concern. In response, the most universally cited area for increased allocation was payroll, with almost 80% of respondents planning small or large increases.

In the current survey, talent continued to be top of mind for respondents, with 92% of executives agreeing that their organizations face critical hiring needs in 2023. Further, CFOs named hiring, staff retention and labor costs as the top challenge they would face this year.

What’s changed is how they’re responding.

Spending increases for payroll seemingly peaked in 2019. Executives expected to decrease the payroll budget in the Spring and Summer 2020 surveys. While they expected to bump payroll spending in 2021 and 2022, those increases paled in comparison to other areas of the business. In the latest report, payroll was second-to last in terms of planned spending increases.

Instead, 82% of executives in the most recent research stated that their companies are adopting technology with the goal of reducing the number of employees needed. When asked about the top action they would take to address workforce issues, 42% of executives cited increasing tech adoption as their main strategy — the second-ranked option. That stands in direct contrast to survey data in Fall 2021 where using automation to reduce headcount came in eighth place out of the 11 options presented.

2. Talent Sentiment Remains Steady

Related, talent sentiment has remained steady — but that’s not necessarily a good thing.

In the Winter 2021 survey, there was a clear schism between executives, managers, and workers. Executives seemed to think workers were happier than they actually were, while managers, not surprisingly, were more in tune with their staffers’ mindsets.

In Spring 2022, only about half of non-finance managers and 44% of finance managers said they liked or loved their jobs. Burnout and lower enthusiasm were understandable for the most part. Research showed that many were working more hours than pre-pandemic and that their jobs had become more difficult as they dealt with obstacles like COVID-19 restrictions, supply chain disruptions, and talent shortages.

Social media posts from friends and neighbors who seemingly had hours to perfect their sourdough starters didn’t help.

However, current data doesn’t show much of an improvement. Last quarter, while 85% of managers said they remained motivated in their jobs, 50% were actively looking for new positions. This quarter was even more striking: 99% of managers and directors remained motivated in their jobs, but half were still looking to hop to a new company.

The possible culprit? Most, 61%, of managers and directors feel held back from innovating by their executive leadership.

The silver lining is that at least the finance department seems to be on top of that complaint. In the current report, CFOs ranked more innovation-conducive skills like data analysis and leadership as the most important when recruiting for the finance team, jumping from fourth and sixth position the previous quarter. Accounting, industry knowledge, and project management dropped to third, fourth, and fifth, respectively.

3. Increasing Interest in High-Tech Solutions

Innovation also comes in the form of new systems, and the past several years of data have shown executives on a journey in terms of technology advancement. At the onset of the pandemic, tech spending increased as businesses dealt with the immediate need for remote work solutions.

However, executives didn’t initially show a strong affinity for advanced technologies like artificial intelligence (AI) or machine learning (ML). In the Spring 2022 survey, only 21% of finance executives said that they had increased AI/ML in the finance department since 2019 while 22% said that they actually decreased use of these solutions, the only area outside of staffing that saw the decrease outweigh the increase.

However, fast forward a year and AI/ML solutions are all the rage. The latest data shows 69% of organizations expecting to increase their use of AI in 2023.

Likely, executives were initially focused on getting foundational technology into place before adding more advanced capabilities. Interest may also be rising due to the hype around ChatGPT as well as the realization that technology will be needed to combat the talent shortage.

4. Cash Flow Is (Now) King

The past several years have seemingly put the fear of subpar financials into the minds of non-finance executives. In the survey we fielded at the end of 2019, the biggest disconnect between finance and non-finance executives was around the importance of cash flow, with the former being significantly more concerned about it.

Yet the economic turmoil over the past several years shifted sentiment. In Summer 2020, 81% of all respondents understandably rankedoperating cash flow as the top KPI their management team wanted to see regularly updated. Finance and non-finance became more in sync by the Summer/Fall 2021 survey, with 38% of finance and 33% of non-finance citing improving cash flow visibility as a top area for improvement.

But by 2022, our shell-shocked non-finance executives were surpassing their finance colleagues in their emphasis on money in and money out: 23% of finance execs listed improving cash flow versus 35% of non-finance execs in the June 2022 survey. Fast-forward to the latest results and 46% of executives say optimizing cash flow is their main tool against inflation — the top cited response.

Bottom Line

One of the more notable impacts of the COVID-19 pandemic was how it drastically accelerated trends and, in turn, the adaptation of businesses. Quarter-over-quarter, we’ve seen the sentiment and priorities of our survey respondents shift rapidly in response to volatile conditions.

Even as the public health emergency around COVID-19 ends, it’s unlikely that pace of change will slow. To understand the latest on executives’ perceptions and plans, be sure to check out the full 2023 Q2 report on CFO.com.

With technology and innovation being the pervasive themes throughout our surveys over the last several years, it’s clear that businesses cannot afford to be complacent. Customers, employees, and the market as a whole expect you to be on the cutting edge.

To learn more about how to stay on the cutting edge, be sure to check out how agile finance can empower your organization.