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Diving overview:
- Most CFOs expect finance headcount to remain flat or decline over the next three years. But the more important change coming to finance departments may be the skills needed as spending on artificial intelligence increases, a recent study by Oliver Wyman found.
- According to an April survey conducted by Marsh’s Oliver Wyman and the New York Stock Exchange, 30% of CFOs expect to reduce headcount over that time, while 61% expect headcount to decline by less than 10% or remain flat.
- However, the study said that “the bigger change may be in the composition of finance staff,” noting that integrating AI and automation into functions is expected to eliminate “labor-intensive finance tasks.” Sixty-four percent of survey respondents said they expect finance teams to shift away from subordinate roles, and this change “reflects a deeper shift in the work itself,” the study said.
Dive Insight:
As companies continue to navigate ongoing macroeconomic and geopolitical uncertainties, many are placing greater emphasis on their finance functions to provide the insight and strategic direction needed to operate effectively in a dynamic environment.
As a result, CFOs need a broader skill set to support traditional finance, the survey found. 70% of finance executives cite “strategy development and transformation” as one of their top priorities, and 72% expect their responsibility to increase in importance over the next three years.
Meanwhile, while remaining core to the role, less than one in 10 CFOs expect reporting, data management and other more traditional CFO responsibilities to increase in importance over the same period, Oliver Wyman found.
CFOs are therefore tasked with both transforming their finance teams to deliver these insights while navigating the continued evolution from financial controllers to value and strategy creators.
A survey of nearly 500 global CFOs found that finance chiefs are “simultaneously operators, allocators, and analytical co-pilots” and are responsible for five different agendas, from effectively scaling AI within their organizations and balancing cost and growth to redesigning and transforming the finance function.
To effectively execute on these sometimes contradictory tasks, finance leaders are looking to change the composition and size of their finance teams, Oliver Wyman says, and are looking for leaner, more experienced finance teams supported by new technology.
“The traditional finance pyramid is beginning to flatten into a mid-level diamond,” the survey found, with 41% of respondents expecting to move into more mid-level finance roles and 23% expecting to move into more senior positions.
Meanwhile, rebalanced teams are expected to make greater use of AI, with many leaders seeing it as a key vehicle for change and transformation in finance – 80%.
Meanwhile, 61% of respondents expect their organizations’ spending on enterprise AI to increase from 5% to 20% by the end of this year.
However, significant gaps remain between the pace of investment and enablement in AI. 70% of CFOs say the use of AI in key financial activities is still in the planning or piloting stages, but only 8% are implementing AI-enabled solutions or agents at scale.
CFOs also need some convincing when using AI as a means of value creation. According to the survey, only 6% cited AI investments as the top lever for increasing company value, “suggesting skepticism about the effectiveness of efforts to date.”
