RH CFOConcerns Sec

CFO Concerns
What Are The

Top Challenges Facing Todays
Financial Executives
Headline
Robert Half CFO Concerns What Are The Top Challenges Facing Todays Financial Executives
Table of Contents
12 About Robert Half International
11 Endnotes
9 Conclusion: Responses to Tough Challenges
Showcase Importance of CFO Role
7 Need to Retain and Motivate Top Performers
6 Pressures to Control Costs and Boost Prots
2 Healthcare: Top of List, Top of Mind
1 Overview: Top Concerns

1
Chief nancial ofcers (CFOs) have had no shortage of challenges over the past few years. The
global recession has required them to use every tool available to guide their companies through
a business downturn of unprecedented scope and into a still-recovering economy.
To better dene the concerns of todays nance executives, Robert Half International conducted
a survey of 1,400 CFOs from a stratied random sample of U.S. companies with 20 or more
employees. We asked CFOs to rank the most pressing concerns facing their company. Their top
three issues were:
1. Healthcare costs
2. Controlling spending and improving protability
3. Staff morale and motivation
Many concerns that emerged through the survey and in selected interviews with nancial
executives are perennial ones controlling spending, improving protability, increasing the
demand for products and services, and monitoring risk yet they seem magnied today amid
a backdrop of persistent uncertainty.
One CFO noted that whats troubling about the nascent economic recovery is that it seems likely
to be a prolonged one, rather than a more dramatic snapback, as in past recoveries that had
clear catalysts for growth and job creation.
Moreover, certain issues facing CFOs in particular, the rising cost of healthcare insurance
remain as problematic as ever, even if the nature of the concern has changed somewhat. Other
of-the-moment challenges mentioned by CFOs in interviews include the need to drive topline
growth, the potential for increased regulation, higher xed costs, competition from outside the
United States, the macroeconomic outlook, pricing pressures, high unemployment and risks
related to doing business in emerging markets.
Overview: Top Concerns

2
When Robert Half Management Resources conducted a similar survey of top CFO concerns in
2006, executives ranked rising healthcare insurance premiums as their top concern. In 2011,
this remains their most worrisome issue, though much of the current uneasiness stems from the
still-uncertain effect of recent healthcare reforms on their businesses.
One public company CFO who said he
expects his rms costs to rise even more
than in past years as a result of healthcare
reforms reects the assessment of most
nancial executives. Like many, he is
concerned that no one seems completely
certain about what the full impact of
reforms will be on businesses or what
unintended consequences may result.
Another interviewee, a CFO of a small
private company, noted that while it re-
mains unclear exactly how healthcare re-
forms will affect a small industrial manu-
facturing business such as his, it also is
not desirable to keep paying more every
year for a healthcare plan that doesnt
meet employees needs. The rms premi-
ums climbed 37 percent this year, partly
because of employee health problems.
Despite the fact that the manufacturer is
paying more than ever for healthcare, he
said, staff members are dissatised with
their insurance plan. On average, about
10 percent of the companys overall com-
pensation costs goes toward healthcare.
Healthcare: Top of List, Top of Mind

Increased Share of Healthcare Costs for
Employers and Employees
(1999-2009)
Annual premiums for employer-sponsored family
healthcare coverage rose over four times the rate of in-
ation and nearly four times the average wage increase
during the last decade:
Average employer premium: +119%
Ination: +29%
Wage earnings: +34%
Due to the size of these dramatic increases, many em-
ployers have had to pass a portion of costs to workers.
As a result, employees have seen their share of job-based
coverage increase at nearly the same rate as employers
during the last decade jumping from
$
1,543 to
$
3,354.
The average cost of employer-sponsored premiums in
2009 was now close to
$
13,100 a year for a family of
four. And employees contributed roughly 27 percent,
on average, toward the premium.
1

Source: National Coalition on Healthcare

Conclusion: Responses to Tough Challenges
Showcases Importance of CFO Role
3
3
Addressing Rising Healthcare Costs
When it comes to managing rising healthcare insurance costs, theres no easy answer. (See Figure
1.) More than one-third (34 percent) of CFOs said their companies are responding by increasing
employees contributions to their premiums; 28 percent said their companies are assuming the
higher costs, and 20 percent said theyre reducing healthcare benets in the face of higher costs.
Many respondents are likely using multiple strategies to offset increases.
Forty-one percent of executives said they are not making any changes to their plans, and 8 percent
said their companies are eliminating healthcare benets altogether. Companies that implemented
* Multiple responses allowed.
28
%

Increasing the companys contribution
to employees healthcare insurance
34
%

Increasing the employees contributions
to their healthcare insurance
20
%

Reducing healthcare benets
7
%

Dont offer healthcare benets
to employees
8
%

Eliminating healthcare
benets
Figure 1: Strategies to Address Rising Health Insurance Costs
CFOs were asked, Which of the following strategies, if any, is your company using
to adapt to the rising cost of healthcare insurance? Their responses
*
:

4
4
pay cuts or freezes during the recession may be reluctant to pass the cost of higher premiums on
to employees. One private company CFO interviewed said his rm felt that it could and should
bear the cost increase because employees had already been dealt across-the-board salary cuts
and the elimination of bonuses and overtime pay.
A different solution was voiced by the CFO of a publicly held consumer goods company who
said his rm might have no choice but to pass costs through to the marketplace. Employees
may not be able to shoulder the added expense and the company has to maintain protability,
but somebodys got to pay for it at the end of the day, he said.
Effect of New Legislation and Regulations
Although businesses are generally averse to the prospect of increased regulation, they may be
especially wary when the details are still in ux, as is the case with several pending reforms.
The uncertainties surrounding new and proposed regulations may serve to heighten CFO anxiety.
When asked about their concerns in the regulatory arena, healthcare again topped the list, with
62 percent of CFOs indicating they believe recently passed healthcare reforms will have the
greatest impact on their organizations this year. (See Figure 2.) CFOs seemed most concerned about
the unknown variables still attached to healthcare, such as the extent of government intervention,
implementation issues and the broad nature of reforms. In addition, unlike other pending regulations,
healthcare reform has more of a direct impact on every business, regardless of size or industry.
By contrast, 7 percent of respondents cited the possible conversion to International Financial
Reporting Standards (IFRS) as the regulatory issue that could have the most signicant bearing
on their accounting and nance department. IFRS are the principles-based nancial reporting
requirements adhered to by more and more countries worldwide, with conversion to these standards
well under way in many nations.
2
Despite the fact that there is not yet a clear timeline or path for IFRS adoption in the United
States, a separate Robert Half survey of 200 nancial executives found that 11 percent used
IFRS in 2010, compared to 5 percent the previous year.
3
Almost 40 percent of companies surveyed
had both domestic and international operations, which may suggest that some felt they had

5
sufcient international exposure to warrant voluntary adoption of IFRS, perhaps in addition
to local or U.S.-based Generally Accepted Accounting Principles (GAAP).
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 represents a press-
ing issue as well. The legislation is considered the most signicant nancial services reform in
the United States in the last 70 years, though it is not just U.S.-headquartered nancial institu-
tions that will feel the effects of the law.
4
By some counts, as many as 350 new rules will need
to be put into effect over the next four years to accomplish the reform changes mandated by the
Dodd-Frank Act. Although the law is aimed at banks and other nancial institutions, some busi-
nesses wonder how additional regulation could affect them as bank customers.
Figure 2: Impact of Various Regulations
CFOs were asked, Which one of the following new or proposed regulations will have the
greatest impact on your accounting and nance department in 2011? Their responses:
Healthcare reform 62%
IFRS 7%
Dodd-Frank Act
(nancial reform law) 3%
Basel III 1%
XBRL 1%
None 24%
Dont know/refused 2%

6
6
Pressures to Control Costs and Boost Prots
Even as many companies prepare to capitalize on improving conditions, the realities of everyday busi-
ness challenges are keeping CFOs focused on controlling spending and improving protability. This
need ranked second on respondents list of priorities.
Especially during the downturn, CFOs were keenly aware that allowing spending to remain high when
revenues were falling would cut directly into prots. Now as the economy is rebounding, CFOs are often
tasked with helping their companies avoid the temptation to return to pre-recession spending levels
before revenues have had a chance to catch up.
Gaining Staffing Flexibility
One way more and more businesses are actively managing costs is by making use of exible stafng
strategies. By using interim staff, companies can convert a portion of one of their largest xed costs
labor into a variable expense thats tied to actual workload highs and lows. This option provides staff-
ing exibility for companies that are worried about the ability of their teams to meet rising workloads,
yet are still uncertain whether the long-term outlook justies full-time hiring.
Contracting interim professionals can also help boost morale. Bringing in reinforcements can alleviate
demands on existing staff, increasing job satisfaction and, in turn, retention.

7
Executives also are concerned about employee engagement and retention: Third on their list of
top concerns was staff morale and motivation.
The growing possibility of losing loyal employees may prompt businesses to take steps to strength-
en bonds with their most indispensable team members. If employees fail to nd satisfaction and
sufcient motivation in their work, they may be prepared to seek greener pastures if they can nd
them. Forty-four percent of U.S. workers surveyed for a separate Robert Half study said they are
more inclined to look for new opportunities outside their rms as a result of their experiences dur-
ing the recession.
5
When CFOs were asked about the perks they plan to offer or are already offering to strengthen
employee retention and motivation, subsidized training and education topped the list, followed by
exible schedules or telecommuting and mentoring programs. (See Figure 3.)
Need to Retain and Motivate Top Performers

8
8
29
%

Subsidized training/education
11
%

On-site perks such as childcare, dry
cleaning, tness center, cafeteria
24
%

Flexible work hours or
telecommuting
10
%

Subsidized transportation
11
%

Free or subsidized lunch or
snacks
7
%

Housing or relocation
assistance
13
%

Matching gift programs
8
%

Sabbaticals
24
%

Mentoring programs
9
%

Subsidized gym memberships
Figure 3: Power of Perks
CFOs were asked, What perks, if any, is your company offering or planning to offer
in 2011 in an effort to attract and retain employees? Their responses
*
:
* Multiple responses allowed.
Need to Retain and Motivate Top Performers

9
There is no question nancial executives are faced with myriad challenges, from coping with
the lingering effects of the recession to trying to maintain service and productivity levels with
smaller employee teams and static budgets to uncertainty about new regulations. Perhaps not
surprisingly, then, more than 80 percent of CFOs said they believe its more difcult to be a
company leader in todays business environment than it was ve years ago. (See Figure 4.)
Figure 4: Business Environment
CFOs were asked, Do you think its more or less challenging to be a company leader
in todays business environment versus ve years ago? Their responses:
Signicantly more
challenging 31%
Somewhat more
challenging 50%
No change 14%
Somewhat less
challenging 3%
Much less challenging 1%
Dont know 1%

10
This has been the toughest two to three years of my career, and Ive been working some 35
years, said a consumer goods company CFO. He added that the challenges CFOs face are more
multidimensional than in the past. Were facing a lot of headwinds on many fronts.
But if there has been a silver lining to this difcult period, it may be that the importance of
the role of nancial executives has been underscored. Indeed, those companies that weathered
the downturn most successfully undoubtedly had highly resourceful nancial leadership at the
helm. As the economy recovers, nancial executives will be on to their next challenge: fueling
and sustaining growth.

11
11
1. National Coalition on Health Care, www.nchc.org/issue-areas/insurance.
2. Guide to International Financial Reporting Standards, Protiviti, 2009, www.protiviti.com.
3. Benchmarking the Finance Function, Financial Executives International and Robert Half
Management Resources, www.roberthalfmr.com/benchmarking.
4. Successfully Complying with Regulatory Reforms Start the Journey Now, Protiviti, 2010,
www.protiviti.com.
5. Workplace Redened: Shifting Generational Attitudes During Economic Change, Robert Half
International, www.roberthalf.us/WorkplaceRedened.
Endnotes

12
About Robert Half International
Founded in 1948, Robert Half International is a global leader in specialized consulting and stafng
services and has a network of more than 400 locations worldwide. The companys nancial stafng
divisions include Accountemps, Robert Half Finance & Accounting and Robert Half Management
Resources, for temporary, full-time and senior-level project professionals, respectively. Robert Half
International also is the parent company of Protiviti, a global business consulting and internal
audit rm composed of experts specializing in risk, advisory and transaction services.
In addition to CFO Concerns: What Are the Top Challenges Facing Todays Financial Executives,
we offer managers a number of complimentary advice booklets, white papers and resource guides
that can help them hire, motivate and retain highly skilled professionals, as well as grow their
own careers. To obtain copies of these materials or learn more about our industry-leading service,
please visit www.roberthalf.com.

Accountemps
accountemps.com
1.800.803.8367
Robert Half

Finance & Accounting
roberthalf.com
1.800.474.4253
Robert Half

Management Resources

roberthalfmr.com
1.888.400.7474
robert hal f. com 1. 800. 803. 8367
2011 Robert Half. An Equal Opportunity Employer. RH-0511

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