As the pandemic first took hold in 2020, few finance leaders could have predicted the extent to which it would disrupt the international business landscape. Finance leaders have battled through 12-months of uncertainty and volatility in which every aspect of business strategy has been tested and challenged.
However, optimism and hopes of a recovery are now growing. In a new report, the Proxima Finance Leaders Outlook 2021, we have delved into the mindset of CFOs and FDs in the US and UK and found that they have an overwhelmingly positive outlook on the next 12 months and are gearing up for a year of growth and proactive investment.
As well as preparing for growth, the budget priorities of finance leaders have notably changed as a result of the pandemic. Social value has risen quickly up the corporate agenda, for example, and technology has increased drastically as a budget priority as finance leaders look to bolster their workforce while working remotely.
In the Proxima Finance Leaders Outlook 2021, we have unlocked six key insights shaping finance leaders’ agenda as they look ahead to recovery this year:
There is smoother sailing forecast after a year of economic and political volatility
Political change in the UK and US has been received with overwhelming positivity by finance leaders. In both the short and long term, more certainty around Brexit and the Biden administration’s new policies for tackling the COVID-19 pandemic are expected to underpin the recovery and benefit the business community in their respective markets.
This is reflected in the broader economic outlook in both the US and UK. 81% of US and 79% of UK finance leaders have a ‘positive’ or ‘extremely positive’ outlook on the next 12 months.
This positivity will be reflected by a year of increased investment and spending
Finance leaders foresee a year of increased investment and expenditure as businesses aim to recover and grow.
82% of US finance leaders and 79% of UK finance leaders indicate that they would be making significant financial investments over the next 12 months, and 91% of US and 90% of UK finance leaders expect ‘significant financial growth’ or ‘some financial growth’ over the next 12 months.
Finance Leaders will take the initiative in times of uncertainty
While there may still be uncertain times ahead, finance leaders will be taking a proactive approach to building business resilience.
Expanding into new markets and introducing new products and services were cited by 52% and 47% respectively as the strategy that they would be using to build overall business resilience. There is also an increasing awareness of the importance of the wider supplier network on business resilience. 84% in the US and 76% of UK finance leaders said that they have changed their supplier base in the last 12 months to build business resilience.
The concept of the workplace will permanently change
The nature of work has drastically changed over the past year and finance leaders indicate that a shift in strategy towards people, teams and facilities lies ahead.
Unsurprisingly, remote working is here to stay. 47% of US and 58% of UK finance leaders say that some form of remote working would remain in place permanently. That said, the office will live on, and a large proportion of finance leaders in the US (56%) and UK (42%) expect to increase their need for office space over the next five years.
This may be tied to expected growth aspirations.
Finance leaders are predicting a rebound in the jobs market over the year ahead, with 75% of US and 64% of UK finance leaders expect to increase the headcount of their business over the next 12 months.
Social value has quickly risen up finance leaders’ agenda
Priorities have shifted throughout the pandemic and social value has quickly risen up the finance leader’s agenda. 69% say that the social value has increased as a budget priority as a result of the pandemic.
The results show an increasing awareness of the importance of suppliers within sustainability priorities, with 79% of US and 57% of UK finance leaders indicating that they are including social value as a criterion in supplier selection.
Procurement will be an important driver of innovation and recovery
Finance leaders looked to the procurement function as an important tool in overcoming the challenges of the pandemic, and it will be one that helps them drive recovery in 2021.
In both markets, finance leaders say they leaned on procurement to help their business overcome COVID-19 challenges in 2020, with both US and UK finance leaders indicating that it had been a ‘very significant’ or ‘relatively significant’ part of their strategy in facing the challenges of the pandemic.
The majority of US (99%) and UK (97%) finance leaders say that procurement will continue to play an important role in adapting their business to recovery in 2021.
You can download the full Proxima Finance Leaders Outlook 2021 report and find out what is shaping finance leaders’ agenda this year by clicking below.