Deloitte has conducted a chief financial officer (CFO) survey, “Deloitte CFO Signals, Survey,” to analyze how executive teams have focused on adapting operations for near-term performance, as well as how leaders evolve business amid the COVID-19 pandemic, the company reported on Tuesday.
"While CFOs are naturally occupied with addressing the near-term realities of these challenging times, it is encouraging to see widespread recognition that an acceleration in digital transformation will lead to significant opportunities and real benefits for society over the long-term," Joe Ucuzoglu, CEO of Deloitte US.
Deloitte’s CFO Signals has tracked the thinking and actions of CFOs within national enterprises. The report has provided key insights into the business environment, company priorities and expectations, finance priorities and CFOs' personal priorities. The Deloitte CFO Signals survey for the third quarter of 2019 was conducted during the period opening May 4, 2020 and ending May 8, 2020. A total of 156 CFOs responded.
The survey noted that perceptions of North America fell drastically, with 1 percent of CFOs rating current conditions as “good.” 58 percent expect better conditions in a year, up from 35 percent. Perceptions of China's current conditions fell slightly to 9 percent, and expectations for a year from now rose sharply to 51 percent.
CFOs' initial optimism has diminished with 60 percent of respondents noting that the milestone will not be reached until 2021 or later. The majority of CFOs optimistic regarding their companies' ability to resume on-site work on at least a limited basis, while under half say they will resume on-site work as soon as governments allow it.
The financial executives have noted that they expect major increases in remote work, automation and cloud computing. 75 percent of CFOs expect more of their workforce to work remotely and nearly half expect a smaller real estate footprint.
75 percent noted that their respective organizations are able to sufficiently manage the risks of on-site work, and most do not expect to provide hazard pay. Additionally, over 70 percent say those who can continue to work remotely will have the option.
Deliotte’s survey noted that year-over-year growth expectations notably decreased, with each metric hitting a new low and turning negative for the first time. Revenue growth slid from 3.7 percent to -8.6 percent and earnings growth fell from 6 percent to -18.7 percent.
55 percent still say U.S. equity markets are overvalued despite very sharp market declines and 30 percent of respondents expect changing FX rates or currency values to impact their business over the next year.
"The pandemic's fallout has been both severe and widespread, resulting in a dramatic drop in CFOs' perceptions of global economic activity… CFOs are cautiously optimistic about reopening, as they work to navigate the future with a remote workforce, and an eye on returning to near normal operational levels in early- to mid-2021," said Sanford Cockrell III, national managing partner of the US Chief Financial Officer Program, Deloitte LLP.
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