As companies face the reality of rising labor costs, a recent study indicates that CFOs in the U.S. remain confident about the economy and their company’s future. According to the Bank of America Merrill Lynch CFO Outlook Report, CFOs ranked the economy four points higher than they did in 2013. Out of a total score of 100, this significant shift in view is just the tip of most CFOs’ optimistic outlook for 2014. In spite of mounting challenges, CFOs are going beyond the numbers to embrace strategy and innovation.CFOs’ Top Concerns for 2014
Although CFOs are tackling challenges head-on, there are still challenges that lie ahead. The CFO Outlook Report shed light on the concerns plaguing companies in the United States. Nearly 70% of CFOs named healthcare costs as a significant concern in 2014. While many companies will try to achieve compliance with the Affordable Care Act without changing coverage, more than 20% of CFOs envisioned a required change in their employees’ current premium or level of coverage. In addition to healthcare costs, the effectiveness of the government and the rising U.S. deficit were major concerns for over half of CFOs interviewed.
Strategies for Growth
Though changes in governmental policy and a rising deficit concern many CFOs, there’s no shortage of growth strategies ahead. According to the CFO Outlook Report, nearly all of CFOs plan to implement at least one growth strategy in 2014. Namely, deeper market penetration, product development and acquisitions top the list of CFO priorities.
- New Products. Nearly two-thirds of CFOs are planning for growth by expanding product lines with insight-based developments. Research and development will remain a priority as nearly 20% of CFOs plan to increase budget limits in 2014.
- Market Penetration. With more than 80% of CFOs planning to further penetrate the market, this strategy appears to be a favorite of 2014. Reaching out to new customers and new markets brings new opportunities to strengthen market presence.
- Acquisitions. Nearly a quarter of CFOs are looking into new market acquisitions. Additionally, many CFOs are not limiting their search to U.S. markets as international markets provide diverse new opportunities.
What steps has your company taken to expand in 2014?