Recruitment of staff and cyber security threat are priority areas for Irish businesses

The recruitment and retention of staff is crucial for business with cyber threat levels also increasing, according to a survey by Ernst & Young (EY) Ireland. 

Cost cutting, cybersecurity, automation and talent are among top strategic priority areas for the finance function of Ireland’s boardrooms, according to 151 respondents to the EY Chief Financial Officer (CFO) Survey

Environmental, social and governance (ESG) falls down the critical list of priorities with only 15% of the CFOs surveyed identifying building skills in non-financial/ESG reporting as a key priority for the next five years

However, 64% of Irish CFOs claim to be optimistic about the economic outlook

The latest EY CFO Survey reveals that Irish CFOs are increasingly grappling with more risk factors amid increasing cyber threat levels, supply chain pressures triggered by geo-political events, and rapid digital disruption. 

The survey, launched to coincide with EY’s annual CFO Summit, also highlights the priorities identified by finance leaders from a variety of sectors, needed to drive efficiencies and support data-led transformation amid mounting challenges on the back of the ongoing energy crisis and recessionary pressures.

According to the survey, 61% say their remit has changed to drive strategic automation within the finance function in the past two years.

Cybersecurity is moving up the business agenda of the 151 Irish CFOs surveyed by EY, with 60% of respondents having increased investment in cybersecurity tools and technology over the past two years.

A similar proportion (59%) over the period have invested in training for employees to improve cybersecurity in their finance functions. The cost of a cyber breach is a constant concern and 30% of respondents have either stepped up their involvement in managing cybersecurity or have increased their organisation’s insurance.

The increased focus on resilience and cybersecurity awareness among finance leaders reflects the growing threat level, the increase in the volume and severity of cyberattacks, and the knock-on significant financial and operational risks this represents for businesses.

Just 10% see opportunities in sustainability and decarbonisation as a driver of growth in the year ahead. Spiralling energy costs, inflationary pressures, and wider economic uncertainty may explain the shift in focus.

“The environmental, social and corporate governance agenda in Irish boardrooms paints a mixed picture this year. ESG cannot be divorced from the broader strategic direction of the business and ESG credentials and sustainability performance will become key competitive differentiators in the near term. This reflects the need for culture change in many organisations while finance teams are still working their way through what non-financial reporting means for their businesses. We anticipate much greater emphasis on building skills in this critical area in the coming years,” said Derarca Dennis, Assurance Partner at EY Ireland.

There is an increasing belief on the part of CFOs that talent shortages can be alleviated, at least in part, through the automation of certain tasks and processes, with 37% saying automating manual tasks and processes will be a key strategic focus over the next five years. This emerged as the second highest priority after cost reductions/increasing efficiencies for the period.

Talent and retention continue to be a significant disruptor for Irish financial leaders, with 40% of the respondents identifying upskilling current staff as a priority for driving growth in the coming year, while a further 34% cited investing in new talent as the best way to drive growth.

Recruitment is clearly a critical success factor, with 44% of respondents citing talent shortages and talent retention as a key challenge to reaching the desired level of growth over the next five years.

On average expected growth for the year ahead is 12%, with 40% saying they are unsure yet of their expected growth.

“CFOs are increasingly playing a strategic role in their organisations beyond the narrow confines of the traditional finance function as their roles are becoming even more encompassing. The finance function had already evolved to become more involved in other areas of the business and that shift was accelerated by the pandemic. The heightened strategic importance of the role should help attract a new generation of finance professionals to support growing Irish businesses,” said George Deegan, Assurance Partner at EY Ireland.

Reflecting on the challenges and opportunities, 64% of Irish CFOs claim to be optimistic about the economic outlook and business prospects for the next 12 to 24 months. Just 23% say they are a little or very pessimistic.