What are the top priorities of CFOs in 2023?

After battling multiple crises during the last three years, the focus of CFOs has shifted to financial performance and growth in the New Year.

CFOs indicated that their top-three priorities in 2023 are cost management (52%), financial performance (50%), and both inorganic and organic growth (38%), according to Deloitte's latest CFO Signals survey.

Two-thirds plan to allocate or reallocate capital to new business investments, and 79% of CFOs said their organizations plan to embed more automation/digital transformation into operations. Nearly half (47%) of CFOs indicated that a downturn in the U.S. economy would constrain their companies' strategy, while one in three CFOs noted that economic headwinds or a recession would constrain their companies' ability to achieve their performance goals in 2023.

Key operating metrics

CFOs again lowered their year-over-year growth expectations for revenue, earnings, capital spending, domestic hiring, and domestic wages. The biggest declines in growth expectations were in revenue, which decreased to 4.2% from 6.2%, and earnings, which dropped to 2.9% from 6.4%. Capital spending growth expectations fell to 4% from 4.3%, and dividends growth dropped to 3.1% from 4% last quarter. CFOs lowered their expectations for domestic hiring growth to 2.1% from 2.6% and for domestic wages/salaries to 4.6% from 4.8%.

Talent outlook

Regarding talent, 41% of CFOs indicated that their organizations plan to hire more people than they let go, while 61% of CFOs noted they plan to implement digital transformation/automation to replace certain jobs previously performed by humans.

Economic outlook

CFOs' sentiment toward current conditions fell across four of the five economic regions covered in the CFO Signals survey, with North America as the exception. More than one-third (35%) of CFOs rated North America's current economy as "good" or "very good," a slight increase from 33% in 3Q22. However, the proportion of CFOs expecting economic conditions in North America to improve in a year was unchanged at 29%. CFOs' assessments of the current and future economies of Europe, China, South America, and Asia, excluding China, were dour. Just 2% of CFOs view the current economy of Europe as "good" or "very good," a decline from last quarter's 7%. Similarly, 3% of CFOs view current economic conditions in China as "good" or "very good," with only 19% anticipating better conditions in a year. Looking at Asia, excluding China, CFOs lowered their assessments of the current economy slightly, to 15% from last quarter's 18%. CFOs' views of South America's current economy stayed flat at 7%.

Own company optimism and risk

The percentage of CFOs expressing pessimism for their companies' financial prospects increased to 41% from 37% in the prior quarter. This figure is the highest it has been since the 2Q20 CFO Signals survey. The proportion of CFOs saying now is a good time to take greater risks fell to 29% from 3Q22's 38%. Geopolitics and political instability stood out as CFOs' most pressing external risk. Talent retention once again led their list of internal worries, followed by prioritisation and execution.