CHICAGO – Not surprisingly, the nation’s chief financial offers have a lot on their minds these days: uncertainty in the U.S. economy, cybersecurity threats, regulatory and compliance issues, and congressional dysfunction around tax reform.
This is all according to Grant Thornton LLP’s latest CFO Survey, which reflects the insights of more than 900 CFOs and other senior financial executives from a range of industries, including retail, across the United States.
Particularly frustrating for CFOs is the dysfunction in Congress over a bill to extend more than 50 popular tax provisions that expired at the end of 2014. As Congress returns from its August recess, it remains to be seen whether it will revisit the bill and allow the use of these tax benefits on 2015 filings.
More than half (55%) of CFOs say uncertainty in the U.S. economy is a major concern that could impact their businesses’ growth in the next 12 months. This is despite the fact that most CFOs expect the U.S. economy overall to remain the same (49%) or improve (43%) in the next 12 months, suggesting that factors other than the overall health of the economy are presenting a barrier to growth.
When it comes to tax extenders, more than a third (37%) of CFOs are acting as though the extension will not occur, while only 9% of CFOs assume fully that the extension will occur. Another quarter of those surveyed are assuming some amount of risk that it will not occur, and are planning accordingly.
“While the U.S. economy has stabilized, our data suggest that uncertainty related to other economic factors is making strategic planning difficult for financial executives,” said Randy Robason, Grant Thornton’s national managing partner of Tax Services. “CFOs are looking to Washington, regulators and the Federal Reserve for answers and getting nothing but indecision.”
Cybersecurity is also a major source of worry for financial leaders. When considering what the most significant cyber risks they face are, 44% of CFOs say the most significant risks are the unknown risks, and 57% say it is the potential for undetected breaches. Interestingly, more public companies (47%) fear they are at risk of reputation loss compared to private companies (31%).
Regulatory and compliance burdens also top the list of concerns for finance chiefs. Nearly half (45%) of CFOs say that increasing costs of compliance present the biggest challenge to growth, and nearly a third (31% ) say that keeping up with the volume and complexity of regulations is their number-one challenge.
Meanwhile, good news for finance professionals: CFOs are aggressively looking to develop and hire new talent. Seventy percent of CFOs say finding and retaining the right talent is a critical need for supporting growth. Forty percent expect their business’s new hiring to increase in the next six months; 52% expect hiring to remain the same. And 67% plan to increase salaries in the coming year, holding steady since 2014.