According to recent research conducted and released by Financial Executives International and Baruch College’s Zicklin School of Business, Chief Financial Officers are viewing the second half of 2013 much more favorably than earlier in the year. As the national economy began gaining traction in the second quarter, CFOs are aggressively reassessing their strategies and growing their financial teams. Particularly notable is the fact that approximately 61 percent of CFOs plan or intend on hiring before the new year.
The trend has already affected many major corporations, including BlackLine Systems, Inc., which recently raised $200 million from Silver Lake. This intake of funds from the private-equity firm will allow BlackLine Systems, Inc. to hire throughout the rest of the year and target new markets. While there are no current plans to take the company forward, the $15 million year-to-year growth is just one reason the financial team is excited.
So what does this mean for CFOs?
- Prepare to hire. Even if CFOs don’t see themselves growing their team, a recovery in the US economy will increase the workload on almost every financial department. Furthermore, a whopping 73 percent of CFOs don’t see any slowdowns in China or India affecting business here in the US. If this is true, then should the economy continue to gain traction it could be all uphill from here.
- Prepare to give raises. Employee compensation is predicted to increase across the board by an average of 3.5 percent. With such concrete predictions available, CFOs can better plan and readjust their budgets not only for the rest of 2013, but as 2014 approaches.
- Prepare for health care. While much has been written on the Affordable Care Act and its ever-evolving implementation, the reality is that it’s impossible to know exactly how it will affect a business until it hits. Yet, it’s extremely clear that companies have underestimated the cost of health care by an average of 4 percent. Regardless of how you deal with this change, CFOs should have some sort of strategy in place.
So as healthcare, cash, capital, inflation, sequestration, interest rates, and quantitative easing remain some of the most common concerns for CFOs, the reality is that optimism is at a relative all-time high!