The Economy and Cash Flow Management Top the Table of CFO Concerns

Latest research conducted by specialist recruitment firm Robert Half reveals that the greatest challenge currently facing UK Chief Financial Officers (CFOs) is ëthe impact that the economic outlook is having on their ability to forecast accuratelyí.

Main CFO Concerns
Cited by 73% of those questioned as part of the Robert Half CFO Confidence Index, the issue has leapfrogged up the table of concerns since equivalent research carried out in the summer, when it ranked as just the number 6 issue on the minds of CFOs.

Against a backdrop of 99% of UK finance leaders claiming to be less confident about the prospects for the UK economy than they were 12 months ago, the top five challenges that CFOs feel they are facing are:

1. Uncertain economic environment and effect on forecasting 73%
2. Cash flow management 58%
3. Increased regulatory burden 57%
4. Managing the balance sheets 47%
5. Quarterly financial reporting 38%

Commenting on the findings, Phil Sheridan, Managing Director of Robert Half UK said: ìOur results show that finance directors are braced for the economic situation to get worse before it gets better with CFOs effectively walking a tightrope right now. They are forced to balance immediate concerns of cash flow management and accurate forecasting and planning, relatively straightforward tasks in times of steady economic growth, with the longer term concern of increased regulatory burdens in a post-downturn business world. CFOs clearly arenít underestimating the scale of the task ahead of them.î

The Outlook for Finance recruitment
The survey, conducted amongst CFOs from a range of companies in terms of size, sector and region, also found that a staggering 91% of CFOs are not planning to recruit new graduates this year, as their confidence in the UK economy hits rock bottom.

Although a fairly grim outlook for graduates, itís a mixed recruitment picture overall with 48% of CFOs expecting some kind of decrease in their permanent staff over the next twelve months, but a slim majority 51% predicting staff numbers will remain constant, suggesting that a significant number of finance leaders believe theyíve cut back enough for the time being, and are adopting a ëwait and seeí approach to their staffing needs.

Phil Sheridan, Managing Director of Robert Half UK continues:
ìFor graduates entering this tough marketplace, flexibility should be key to their approach. Temporary work can be an option for graduates to gain valuable experience in working in this kind of market. For employers, itís a tough balancing act between cutting back on graduate recruitment now, and avoiding a talent shortage when the inevitable upturn comes.î

Regulation on the Increase
The second issue that has seen a significant rise from 7th to 3rd place on the minds of CFOs is ëan increase in regulatory burdení suggesting that the global credit crunch may well leave a permanent mark on finance departments with a much greater focus on this area by finance leaders.

Temporary & Interim Workers
Whilst few CFOs plan to make permanent hires in the coming year. The most popular reason for hiring temporary and interim staff was ëto cover an open positioní (25%), closely followed by ëcost effectiveness – keeping permanent headcount to a minimumí (24%) and ëproviding access to hard to find skillsí (23%).

Other key findings included:

A significant 37% of finance leaders reported seeing their departments ëtaking on more responsibility for different aspects of the businessí over the previous 12 months

London based finance leaders are less confident about the prospects for their own companies than their counterparts in the Midlands and Southern England, but not as pessimistic as those in Scotland and Northern England (see index graphs)

Over half (52%) of CFOs said that the finance department is seen as ëintegral to all aspects of the businessí, and 38% said it was seen as ëthe solution to many problemsí

The Robert Half CFO Confidence Index was compiled following a survey conducted by independent research firm Illuminus of 180 Chief Finance Officers from across the UK, comprising small, medium and large firms, both private and publically listed and across all major industry sectors. The research was conducted in January and February 2009.