CFOs rate persistent labour shortages, the pandemic, climate change and higher inflation respectively as the top risks facing their businesses, according to Deloitte’s UK CFO Survey Q4 2021. Compared to this time last year, CFOs have reduced their risk rating for the Covid-19 pandemic. By contrast, labour and supply shortages have emerged as significant short-term risks over the last year, resulting in a higher risk rating for inflation.
Almost half of the CFOs surveyed (46%) reported that their businesses have faced significant or severe recruitment difficulties over the last three months. Things are expected to improve in 2022, with 24% of CFOs expecting significant or severe recruitment difficulties in a year’s time.
The survey found that finance leaders are focused on growth, with a record 37% rating an increase in capital investment as a strong priority for their business in the next 12 months. Expansionary strategies, including introducing new products and services, expanding into new markets and raising investment are a greater focus now than at any time since the question was first asked in 2009.
CFOs cite growth in demand at home and abroad, and the climate transition as the main drivers of investment. On the type of investment, an overwhelming majority of CFOs expect to invest more in digital technology (94%) and workforce skills (77%) over the next three years, than in the years before than pandemic. Also, most CFOs (84%) expect productivity to grow faster in the next three years, than in the years before the pandemic.
Ian Stewart, chief economist at Deloitte, says: “Like equity markets, which rallied into the new year, CFOs seem to be looking past Omicron and plan to focus their businesses on growth in 2022.
“It is a measure both of the remarkable snap-back in activity from the pandemic and the scale of the challenge today that CFOs rate labour shortages as the greatest risk to business. This is ahead of even the pandemic, in second place. Strikingly, the worries that dominated the risk list in recent years – above all Brexit and weak global growth – have dropped sharply down the risk rankings.”
