Irish finance leaders cite people and talent as top priorities for driving growth in 2022
12 April 2022 | 0
The inaugural EY Ireland CFO Survey reveals that Irish-based companies are on track to perform well in the upcoming financial year, despite headwinds emanating from the uncertain global macro-economic backdrop. The average growth rate forecast by Irish finance leaders was 12%. Among the most bullish of the respondents surveyed, were 28% who expected growth to exceed 10%.
The survey, which was made up of 152 CFOs and finance leaders in Ireland from organisations across a variety of sectors, shows that growth will primarily come from organic sources over the period. People and talent (36%), expansion into new markets (33%), innovation (30%), and investment in technology (24%) were cited as the key drivers of growth for the year ahead in the eyes of Irish CFOs.
“Despite a very challenging macro-economic environment due to inflation and the impact of the war in Ukraine on the global economy, which resulted in the Central Bank of Ireland revising down its growth forecasts for the wider economy, the results are testament in no small part to the agile nature of Irish business in navigating these challenges. There are some significant issues to be overcome, but it’s encouraging to see that finance leaders are facing these challenges from a position of relative strength,” said George Deegan, assurance partner and EY CFO programme lead.
People & talent are key
When seeking growth, talent and people emerged as a top priority for Ireland’s business finance leaders. Succession planning and talent development were referenced by almost a third (28%) of all finance leaders as one of the biggest priorities over the next five years.
Similarly, finding the right people and talent to achieve the desired level of growth over the next five years, remains the number one cause for concern among the participants surveyed. Talent-related challenges were referenced among.
“Instead of a ‘great resignation’, what we are witnessing is a ‘great re-evaluation’ where employees are keenly re-assessing what they want from their careers, their employers and what are the lives they want to lead. This is one of the lasting effects of the pandemic where the switch to remote and flexible working along with quite fundamental changes to business models have given employees cause as well as space to reflect on career and life priorities,” commented Derarca Dennis, EY Ireland assurance partner.
ESG coming into view
Nearly half of all Irish CFOs (44%) rated the maturity of their organisation’s ESG performance monitoring and reporting capabilities as either established or mature, reflecting the emphasis sustainability criteria have on an organisation’s priorities and structure.
Despite the emphasis organisations have placed on ESG reporting and monitoring, they were seen in a less favourable light when it comes to enabling growth, with just 10% of respondents seeing opportunities in sustainability and decarbonisation as a primary growth driver in the year ahead.
There is nonetheless clear interest among finance leaders in spending more time working on sustainability and ESG issues. For instance, 52% of finance leaders would like to spend more time on risk management, including climate risk, while 48% wish to spend more time on sustainability regulatory compliance.
“This study was conducted at a time of intense geopolitical disruption, along with the continuing impacts of the Covid-19 pandemic, so it may not be surprising to see that CFOs and finance functions alike are focused on steadying the ship and tackling short-term challenges, so it may be that long-term value-driving areas like ESG and sustainability have fallen temporarily down the priority list as they focus on the immediate tasks at hand,” said Derarca Dennis.
“However, this is clearly still a cause for some concern,” Dennis added. “The finance function of the future must play a much more strategic role and that includes influencing the ESG agenda across the entire organisation as it will be finance leaders who have responsibility for reporting performance and progress on this increasingly important area.”
Finance digital transformation
The results of the EY Ireland CFO survey indicate that finance leaders are using technology to achieve process efficiencies with 24% of respondents identifying investment in technology as a priority for driving growth in the next five years, while 14% mentioned data and analytics.
More than half (53%) of the respondents claimed that their organisation had undertaken a finance transformation or cost optimisation programme within the last five years. And more than a third had undertaken one within the last two years. But in contrast, almost a third (32%) do not foresee any change in their operational model in the next five years.
“Organisations that believe digital transformation is central to their future growth but refuse to evolve or adapt to this change will get left behind,” concluded Deegan. “Even though finance leaders are aware of the role technology has to play within their operations, that awareness needs to be built upon and turned into a greater understanding for the potential of technology to support and drive change and transformation.”