In 2023, CFOs Prefer Smart Tech Investments Over Headcount Cuts to Combat Recession

The results are in: CFOs in 2023 are cautiously optimistic for the future, opting for calculated spending with high-impact outcomes in mind.

Pigment, the enterprise planning platform empowering Finance, Sales, and HR teams to make better decisions, and Balance Sheet, the popular daily newsletter for highly ambitious finance teams, talked layoffs, recession, and technology with an exclusive audience of reputed CFOs and investors.

Pigment’s Head of Finance, Chloe Giraut-Pierron , leads with commentary on the mounting pressure on CFOs to navigate the uncertain “new normal”:

“As CFOs, we’re under dire pressure to be agile, make wise investments, and help our companies remain profitable. I also believe the onus is on us to encourage proactive spending habits while still making sure that we stay within budget. This means shifting our focus from traditional financial reporting towards a finance function that actively drives the company’s strategic decisions. It has never been more urgent to embrace technology and use it to our advantage.”

Within the report, it was found that 18% of CFOs are looking at further reducing headcount to cut costs with an overall 14% planning to actively cost-cutting in 2023. Instead, 59% of CFOs list sustained profits and growth as the biggest priority for their company this upcoming year.

CFOs remain optimistic about hiring in 2023; only 21% anticipate it being more difficult than before. They are also considering high salaries and great perks as tools to hire and retain top talent, with 61% looking at these strategies. Controllers, AP/AR, and FP&A roles have been identified as the top hiring priorities for this coming year.

Ajay Vashee , General Partner at IVP and former CFO at Dropbox comments:

“The most important thing for a finance organization is impact orientation. What can your team be doing to strategically disrupt their business? With the right people and tooling, they can gain such a unique perspective into everything that’s happening at the company that it’s almost incumbent on them to be bringing the biggest ideas to the table.”

To combat the effects of the recession and ensure future success, 71% of CFOs are turning towards technology to plan for any potential downturns. Chloé Giraut shares:

“Investing heavily in tools and systems doesn’t just make us more efficient, it means we don’t need to recruit a full army of junior people to focus on low value-added tasks. This, in turn, increases retention.”

Rob Ward , Co-founder and General Partner at Meritech Capital talks to the importance of financial planning tools:

“As a CFO, and as a finance team, you need to be completely plugged into what all departments are doing. That’s not possible without some of these newer budgeting planning tools.”

The findings from the CFO State of the Market 2023 show that CFOs are taking a smarter approach when it comes to spending during a recession.

By investing in technology and providing attractive compensation packages they can ensure their businesses remain strong despite any economic uncertainty.

Read the CFO State of the Market, 2023 Report for more insights into CFO priorities for the year.