The CFO'S Perspective

Knowing when to hire employees and how much to pay them can make or break a hiring strategy. However, this is not the entire picture. Benefits are just as important to your strategic hiring plan. In light of the growing number of people leaving their jobs in recent months, which has been dubbed The Great Resignation, understanding this concept has never been more important than it is these days.

COVID 19 has made a significant impact on everyone. Those who are close to retirement and those who feel uneasy about their employers' plans to return to the office cannot stop talking about it. They are trying to answer the looming question – "What do I want to do with my life, especially if this pandemic may curtail it?"

COVID-19 has been a significant disrupter to the traditional “work until you're 65, then retire” path. Now that the world is opening, we are expecting a flood of job changes, working fractionally, changing careers, and retiring because everyone has come face to face with the realization that life is short. With this realization, many are planning to make dramatic changes in their lives.

Filling this workforce gap will be challenging. Statistics show that 28.6 million Baby Boomers (born 1946 to 1964) are now out of the workforce in 2020. According to a Pew Research report, that's 3.2 million more than those who said they were retired during the same period in 2019. That may seem average but consider that there is a deficit of about 5 million fewer Generation X (born 1965 to 1980) professionals that could be ready to step into the Baby Boomers' vacant roles.  I have a friend who is 55, who quit his more than full-time, high-paying, executive job in 2020. He invested in a business overseas and plans to move there with his spouse and work part-time.

With a large segment of the workforce still working from home, what does this mean for the future of commercial real estate? According to recent data, office vacancy rates are over 16% right now (up from 9% in late 2019) and subleased space is coming back on the market. This has led many analysts to wonder whether companies still need the offices they had before and what will happen to all the vacant office space if companies do not return.

What does the future hold? Will the office building survive COVID-19, or is office space now obsolete?

A business owner should always have a succession plan, yet at the same time be ready when a member of their executive team is ready to implement their own exit strategy, i.e., retirement. The Great Recession caused many people to need to work longer until retiring because of the loss of income and value of retirement assets. But now, a decade has passed, which has given some the time to replenish their retirement savings. As a result of the COVID19 pandemic many people are re-evaluating what is important to them, and in many instances, it means retiring a few years sooner than originally planned.

Downsizing is never a light topic to broach, but for businesses that are financially compromised or experiencing a reduction in demand, it is important to fully understand before any strategic planning can begin.

Downsizing is often tied to a reduction in headcount. Headcount is more than just a number, which is why downsizing should be approached with the utmost care and consideration. Knowing why a company should downsize, what kind of risk is associated with doing so, and how to avoid common mistakes is key to increasing the likelihood that your reduction efforts will be successful.

Use this guide to get a better understanding of the implications of downsizing and help inform your strategic planning as it relates to both maintaining your business and preparing it for sale.

As more people begin to get vaccinated, we are eager to return to what life was like in the "before times" to plan vacations, in-person meetings, even concerts and ballgames. When it comes to the workplace, there is no turning back the clock to how we used to do things. Wise leaders will capitalize on the innovations developed during the transition to continue remote operations by retaining the process improvements to be sustainable, regardless of what comes next.

Attitudes around FP&A (financial planning and analysis) are kind of a mixed bag – everyone agrees it is important, but many people do not know what it really entails. As a result, businesspeople form their own opinions about who should handle it and what owning it should look like.

Some business leaders downplay the complexity of FP&A and mistakenly task their accounting and finance teams with this crucial function. This can be a mismatch because many accountants are not equipped to handle this level of financial responsibility and organizational oversight. Alternatively, some business leaders put FP&A on a pedestal and assume its critical role in the success of an organization necessitates a dedicated role.

Regardless of what precipitates a recession, economic ebbs and flows are to be expected over time. Recessions can be caused by a period of contraction that inevitably comes after economic expansion or a sudden and unexpected economic shock.

While the coronavirus recession is fresh on our minds, it is not the first nor will it be the last recession that today’s businesses face. Knowing how to weather a recession is an essential management skill regardless of how long it lasts. However, facing a prolonged recession poses unique challenges that can test even the most adept leaders.

Our team of experienced CFOs shares their top tips on getting through a recession and coming out stronger on the other side: