top of page

CFOs Prioritize Building Resilience in the Face of Recession

CFOs Prioritize Building Resilience in the Face of Recession

Amidst a challenging mix of economic risks like a potential recession, higher inflation, increasing interest rates, and global uncertainties, CFOs are guiding their organizations like headlights in a storm. They're particularly focused on getting their companies prepared to deal with the effects of slowing global demand on their profits.

Differing Perspectives

CFOs and COOs hold differing viewpoints concerning the potential occurrence of a recession due to their distinct focuses on how inflation and other economic challenges have impacted various areas of the business.

CFOs are putting their efforts into strategies to counter inflation, control costs, and carefully allocate capital to come out stronger from a potential economic downturn. They're also intensifying their scenario planning to better predict how the recession could impact the business. Despite all this, most CFOs believe they can enhance their resilience and still achieve their long-term growth goals.

CFOs’ Counter Approach

During a recent discussion, it was noted that CFOs have dedicated considerable time during and after the COVID-19 crisis to establish scenario plans, strengthen financial foundations, and streamline cost structures. This effort has led to optimism among CFOs that they can effectively steer the company toward financial success across multiple scenarios.

On the other hand, COOs approach the situation from an operational perspective, concentrating on the intricacies of transformation. This includes transforming aspects like the workforce, customer experience, and risk management functions. Consequently, COOs approach the transformation process with more cautiousness than CFOs. CFOs are more inclined to allocate capital, invest in the future, and generate outcomes for stakeholders.

Shifting Economic Indicators

Recent economic indicators, such as robust consumer spending and a strong labor market, have prompted some economists, including those at the Federal Reserve, to reconsider their predictions of a recession. Instead, there is growing anticipation of a mild economic slowdown, often referred to as a "soft landing."

Despite these shifts, leadership remains less concerned about major risk factors compared to a year ago. This allows them to refocus on business growth and investment in emerging technologies. However, there's still an underlying sense of caution regarding the potential for a recession. Economic growth is expected to remain uneven, and economic uncertainty continues to be a top risk factor according to many executives.

A recent PwC Pulse Survey highlights that 70% of CFOs are very worried about how these economic conditions might affect their businesses (compared to 56% in general). About one-third of financial leaders are dedicating much more time to dealing with inflation compared to a year ago, while 36% strongly agree (and another 46% agree) that a recession will happen within six months.

The survey conducted by PwC between August 1 and August 8 gathered responses from various C-suite members, including CFOs, COOs, chief information officers, chief technology officers, and chief human resource officers. The survey found that the primary business risk identified by 74% of executives is frequent or broader cyberattacks, followed by economic uncertainty at 72%, and talent acquisition and retention at 71%. Additionally, 28% of executives expressed concerns about margin pressure, indicating it as a significant risk to their businesses.

Simpler Periods Require Planning and Wise Spending

CFOs with a forward-thinking perspective remain focused on expanding their businesses while carefully reviewing expenses and guiding their teams to do the same. Some spending is still necessary, especially for investments that align with long-term growth plans, like constructing new facilities.

As they streamline costs, CFOs can embrace agile, data-driven scenario planning to anticipate the effects of important decisions or market changes. This approach appears to show positive results. A majority of CFOs have managed to balance price increases with ongoing customer demand, and the rest have adjusted their compensation strategies to address higher wage pressures.

For financial leaders, who just two months ago were more concerned than other executives about acquiring and retaining talent, finding this balance might even involve strategic hiring. Over half of CFOs plan to make targeted hires in the next 12 to 18 months to drive growth.


CFOs are leading companies through turbulent times as they prepare for the upcoming challenges by planning ahead and being wise with their resources. Although some economic indicators show positive results, caution is still necessary due to its volatile growth. The survey only highlights concerns that need to be prioritized such as talent issues and brewing stronger strategies.

This only highlights the CFOs' adaptability by planning agile responses for their companies’ growth. Combined with careful spending, this approach is likely to be the key to success in this changing economic landscape.

20 views0 comments


bottom of page