Over eighty-five percent of financial leaders contemplate cutting back or temporarily halting expenditures to achieve immediate goals.
In the midst of the year's halfway point, finance chiefs the world over find themselves caught between a rock and a hard place - short-term financial stability and long-term growth prosperity. This delicate balancing act has become the norm in boardrooms across the globe.
According to a recent survey by EY, finance leaders are under immense pressure to slash costs while maintaining investments in long-term growth initiatives. However, the EY data suggests that this delicate balance might be tilting toward short-term gains at the expense of future growth potential.
Trade-off Dilemmas
Nearly 80% of the surveyed finance leaders conceded that striking a balance between short-term and long-term objectives is a significant challenge. Simultaneously, a similar number (76%) admitted that the current economic climate is intensifying the pressure to drive short-term profitability and meet earnings targets.
In response to these pressures, 90% of finance leaders are planning cost-cutting measures, even if they means pausing or scaling back investments in areas deemed essential for long-term success. As per EY's findings, around half of the respondents acknowledged that they accomplish short-term earnings by slashing funding for long-term priorities within their organizations.
For business leaders concerned about the future, these cutbacks might be the only way to maintain the status quo. However, over two-thirds (67%) of the respondents voiced dissent about this approach, expressing concerns over tension within leadership teams regarding prioritizing short-term gains versus long-term sustainability.
Strategic Uncertainty and Traditionalism
Finance chiefs are employing other strategies to hold tight to short-term gains while minimizing drastic changes, especially in the financial realm. A mere 14% of respondents expressed plans for a bold transformation initiative over the next three years.
However, among those pursuing bold strategies, over half (55%) consider culture change to be pivotal to their endeavors.
Conversely, hesitancy toward change, among leaders and employees, threatens a proper balance between short- and long-term goals. Nearly 72% of respondents attributed "traditional back-office behaviors and mindsets" as an obstacle to modernizing their companies.
Defining Future Goals and Leveraging Strengths
Multitasking for both their businesses and careers, finance chiefs are building enterprises that cater to both immediate demands and long-term opportunities. Although today's circumstances may not expose the traditional finance skills of these leaders, these encounters might serve to forge their destinies. Forty-five percent of those surveyed aspire to reach the CEO's office.
Upskilling and ongoing learning are the biggest challenges for finance leaders, according to EY. Their primary challenge remains "finding time to build knowledge and expertise through exposure to external expertise and access to thought leadership."
Despite the perceived resource constraints, finance leaders aiming for transformative change within their companies remain confident in their ability to recruit quality talent.
In their quest to develop sustainable, high-quality teams, 58% of finance leaders executing a bold strategy expressed confidence in their ability to pick quality employees early in their careers. This conviction drops significantly for those embracing a more conservative approach, with only 43% holding such confidence.
- Finance leaders worldwide are under pressure to reduce costs while maintaining investments in long-term growth initiatives, according to a recent survey by EY.
- Over 80% of finance leaders acknowledge striking a balance between short-term and long-term objectives as a significant challenge.
- In response to these pressures, 90% of finance leaders are planning cost-cutting measures, even if it means pausing or scaling back investments in areas deemed essential for long-term success.
- Over two-thirds (67%) of finance leaders voiced concerns about tension within leadership teams regarding prioritizing short-term gains versus long-term sustainability.
- More than half (55%) of finance leaders pursuing bold strategies consider culture change as pivotal to their initiatives, while 72% attribute traditional back-office behaviors and mindsets as an obstacle to modernizing their companies.
- Upskilling and ongoing learning are the biggest challenges for finance leaders, as they aim to build enterprises catering to both immediate demands and long-term opportunities, with 45% of those surveyed aspiring to reach the CEO's office.
