Arizona CFOs maintain economic optimism across industries
Talent — getting enough quality talent and keeping it — is the primary economic and reputation concern of leaders participating in the third-annual Arizona CFO Spotlight Survey conducted by BeachFleischman PC.
The hunt for talent edged out two-year survey leading indicator “consumer confidence” as the main factor that leaders say could impact revenue in 2018. Available skilled talent was chosen by 79% of leaders in the survey as the top priority to improve business opportunities (compared to 59% in 2016). In response, leaders are looking toward automation and other technology to reduce their need for talent while taking advantage of new corporate tax laws and lowered tax rates to plan capital investments.
Optimism is on the rise
Based on three years of data analysis from hundreds of CFOs and leaders around Phoenix and Tucson, the 2018 survey reveals steady improvements in optimism across several industries — and most strikingly among leaders in Tucson, where they’ve experienced a boom in corporate newcomers and job growth. Levels of optimism among all leaders regarding the economic climate of Arizona have grown from 43% of respondents in 2016 to 60% of respondents for 2018. Optimism in Phoenix is now at 86% and optimism in Tucson is at 95%.
Managing change and disruption
While the survey indicates a slight uptick in concern over a consistent immigration policy, CFOs and executives were far more concerned with tax incentives and developing next generation leaders — another indication that labor shortages overall and high operational costs are the primary hurdles for growth right now.
Does this mean that it is business as usual with these traditional business concerns? Not necessarily. Over the past three years, leaders have shown increased concern about their role as change agents — in particular protecting their organizations from cyber-attacks and managing a multi-generational workforce. Their top contributions include collaboration and communication in order to deliver timely forecasting data for business decisions. Approximately 76% of respondents cited “continuous innovation” as their top change management strategy.
“Technology is definitely high on the minds of leaders as they deal with labor shortages,” noted Marc D. Fleischman, Chief Executive Officer of BeachFleischman. “Across the major industries we surveyed, 33 percent of leaders cited artificial intelligence as a key consideration or investment in their change management strategy in the next 12 months.”
Other Key Survey Findings:
• Education/training has maintained high value among leaders as a top recruitment and retention benefit — ranked by 60% of leaders over the past three years of the survey.
• Concern over border security/immigration policy remains at 11% of leaders for two years of the survey.
• Prices are going up among 40% of leaders in the survey, an increase from 32% in 2016 across all industries surveyed.
• The top state infrastructure request is public transit, followed by wider roads and IT improvements.
• Cybersecurity measures over the past two years have 90% of respondents fairly confident that they can protect their organizations from a data breach, but only 32.5% noted active disaster planning in the event of a breach.
• Since the survey began in 2016, flexible scheduling as a real employee benefit has earned its stripes. This year, 64% of leaders said their companies or organizations offer “flexible scheduling” (45% in 2017). Also, 42% of leaders offer “work at home” options as a competitive benefit (24% in 2017).
• Although CFOs have cited little concern over water supply issues in Arizona for the past three years of the survey, a new question this year noted that top impacts of water shortages on businesses could be higher utility costs, population decline and lower potential business values, according to respondents.
• Uncertainty about access to flexible financing has increased slightly from a year ago, particularly among real estate, not-for-profit and high-tech industry leaders.
For a full download of the 2018 survey, visit https://beachfleischman.com/resources/arizona-cfo-spotlight-survey-2018/.