Automation, outsourcing, and hiring freezes top of mind for US finance leaders
by Pushpendra Mehta, Executive Writer, CTMfile
As 2022 approaches its final weeks, finance chiefs in the US are gravitating towards automation, outsourcing, and hiring freezes to support their teams and organizations.
“Faced with a potential recession—and the hiring freezes that often accompany one—companies will need to ensure that all their critical tasks are completed accurately and on time. If hiring more employees isn’t an option, automation and outsourcing represent a way forward, one that creates opportunities for existing employees”, states OneSource Virtual’s 2023 CFO Outlook Report. The report surveyed just over 100 US CFOs to see where they stand on automating and outsourcing their finance tasks going into 2023.
Prioritizing automation to drive digital transformation
CFOs are prioritizing automation as a part of their digital transformation efforts.
Finance leaders surveyed believe that automation is important for finance, with nearly all (95%) of them having already automated their processes, reflecting the rising importance of digital transformation. However, the levels of automation vary significantly, with 46% describing their operations as “very automated”, 49% as “somewhat automated”, and 5% reporting their operations as “not automated”.
When asked specifically about automating their accounts payable (AP) processes, 84% of survey respondents had already begun automating their AP tasks. For those respondents (16%) who hadn’t been able to automate AP processes, a lack of time and resources were among the biggest obstacles that prevented implementation of AP automation.
Organizations that have invested heavily in technology to propel their digitalisation initiatives have focused more of their recent technology investments on cloud computing, machine learning (ML) and connectivity tools such as application programming interfaces (APIs). “What has changed is the ability for cloud and SaaS solutions to plug and play with large-scale ERPs”, said Courtny Cloeter, chief revenue officer of OneSource Virtual in a recent article that gave the survey report coverage and was published in CFO.
“I see investment and functionality only accelerating in the future as companies look to improve productivity through automation.” According to Cloeter, it comes down to “A balance of identifying the most impactful place of automation while creating the best work environment for the employees who survive freezes and cuts.”
In this context, finance chiefs are automating remedial finance and accounting tasks, freeing up their team to focus on more strategic tasks that can counteract decline in economic activity by driving growth.
Looming recession, hiring freezes and outsourcing: the connection
With a US recession on the horizon, 83% of CFOs are preparing for a hiring freeze. As they go about enacting a hiring freeze, finance leaders are turning to outsourcing as a viable option, should workloads increase while hiring isn’t permitted.
Source: OneSource Virtual’s 2023 CFO Outlook Report
No one wants to activate a hiring freeze, but making that call is part of protecting a corporation’s growth and profitability and ensuring that all crucial tasks are completed correctly and on time.
Companies are facing another serious challenge as they head into a recession – understaffing. With nearly a third (32%) of survey respondents stating that their teams are understaffed and their employees are having to wear multiple hats to support the business, a large majority (61%) of the CFOs surveyed indicated they are “very likely” or “somewhat likely” (34%) to consider outsourcing for certain accounting and finance-related tasks like invoice processing and invoice payment.
As per the report, “74% of surveyed CFOs identified extra capacity as the top reason for outsourcing their finance and accounting tasks. For understaffed teams, this could be a lifesaver.”
Source: OneSource Virtual’s 2023 CFO Outlook Report
Outsourcing not only addresses today’s skill shortage, but can also provide relief for understaffed teams, reducing the amount of time employees have to spend on mundane or repeatable activities and enabling their skill sets to be used elsewhere. It is for these reasons that the majority of the survey respondents are prioritising and preferring outsourcing over reducing headcount.
Conclusion
As the skills shortage in the US worsens and recession fears intensify, finance decision-makers in America are focusing on automation, outsourcing and hiring freezes to put their teams in the best position to remain productive and not feel overworked. Today’s CFOs are expected to be more strategic and forward-looking. Creating opportunities internally to help their employees pursue more strategic initiatives will help them drive both short-term profit and long-term growth.
Like this item? Get our Weekly Update newsletter. Subscribe today