CFOs are becoming c-suite heroes for their pandemic response, as FP&A has been thrust into the spotlight of constant scenario planning and forecasting. Uncertainty, of course, remains the name of the game, and a pile of new surveys shows that most CFOs expect that to continue. On the bright side, they also expect 2021 salaries to increase (albeit slightly), and remote work to continue driving productivity gains.
Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.
What the Experts are Saying on FP&A
CFO: CFOs to the Rescue
Many CFOs stepped up to face the multitude of challenges companies experienced during the pandemic. A recent survey indicates increases in FP&A productivity during remote work, the acceleration of automation efforts, and constant financial modeling and scenario planning all added up to further burnish the CFO image. Whether they can maintain that position, however, depends on how well they can provide predictability amid ongoing uncertainty. “Looking ahead, the CFO is well-positioned to lead the way as an enterprise value creator.”
Healthcare benefits are a major component of every company’s employee budget. The past 4 years have seen a 6 to 7% annual increase to this line item, and while 2020 benefit costs are expected to increase at a slightly lower rate, many are forecasting costs to rise by more than 8% in 2021. That’s coupled with uncertainty on health-related costs as employees’ altered habits make it difficult to predict how these costs might shift. “People are deferring many routine medical treatments during the coronavirus pandemic, creating unexpected savings for some employers, while making it harder for companies to forecast health-benefit costs in the year ahead.”
When asked about their plans back in March, three-quarters of CFOs said they expected to move at least 5% of workers to permanently remote roles. Now, after living with it for several months, they’re expecting that share to be much higher. Behind the shift, it seems, is that CFOs were initially wary of a productivity drop. But those concerns are quickly fading, and some have even seen productivity increase as much as 15%. “The CFOs in most organizations want to make sure they get the best return they can per dollar spent on employees.”
Ongoing budget concerns means raises will be smaller next year. That’s what Willis Towers Watson found in a recent survey of employers. Non-executive employees are still projected to get a 2.6% increase in 2021, and 84% of companies expect to offer pay raises. “For many companies, reducing salary budgets, and in some cases, suspending pay raises, was the most viable option, as they balance remaining competitive with maintaining financial stability.”
Stay Tuned for More Useful FP&A Content
We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.