CFO Survey Q1 2013

Half of Belgian CFOs responding to survey plan headcount cuts by 2014

Deloitte Belgium announces the results of its quarterly CFO Survey. Against a backdrop of continued economic uncertainty, 49% of the 63 CFOs participating expect their organisation’s headcount to fall by 2014.

Brussels, 03 May 2013 - Deloitte Belgium announces the results of its quarterly CFO Survey, conducted between March 13th and April 3rd. Against a backdrop of continued economic uncertainty, 49% of the 63 CFOs participating expect their organisation’s headcount to fall by 2014, with 11% predicting a workforce reduction of over 5%. Optimism levels have dropped, the business climate remains unpredictable and a quarter of CFOs do not expect growth to return before 2015. Defensive strategies remain the dominant theme.

Workforce reductions to boost competitiveness
The survey shows the top priority for Belgian CFOs in the coming 12 months is to increase productivity and efficiency, followed closely by that of reducing costs. This strong appetite for change follows a first quarter in which 57% of organisations performed worse than expected. In their drive for increased competitiveness, close to 60% of businesses with a turnover over €100 million expect to cut headcount by the end of 2014. Of businesses under €100 million, 38% predict workforce reductions. 

Large scale, headline-grabbing layoffs seem unlikely. CFOs expect employee numbers to be reduced mainly on a sporadic basis, or through natural loss, such as staff retiring without being replaced.

CFOs dissatisfied with government policies on taxation and the labour market
The first quarter has seen a significant increase in CFOs’ negativity towards the Belgian government’s approach to financial and economic policy making. Perception moved from -20% in Q4 2012 to -52% in Q1 2013, with only a small number reporting a positive attitude.

As many of the CFOs surveyed prepare for headcount cuts, the majority believe long-term success in Belgium is held back by government policies for the labour market. 73% regard the current policies as inappropriate, whilst one third of CFOs (33%) say they are very inappropriate.

Reforms CFOs believe would make the biggest contribution to the competitiveness and success of their businesses are reducing labour costs by cutting the employers’ social contribution, and changing the system for automatic indexation of wages.

Looking beyond the labour market, almost half of CFOs stated that financial and economic policy making in Belgium had a negative effect on their investment plans in the last 12 months, coming second only to the continuing uncertainty in the wider economic environment.

Economic recovery continues to be postponed
The top concern of Belgian CFOs is the economic recovery, or rather, its absence. While some have positive, albeit moderate, growth expectations for Belgium in 2013, the vast majority expect growth anywhere in the range between -1% and 0.1%, with many concerned that the movement will be negative. Almost eight out of ten CFOs now believe recovery will commence in 2014.

While the worst of the Euro-crisis seems to be in the past, with the financial crisis in Cyprus, there is again something of a jump in the number of CFOs who think member states may leave the Eurozone in the year ahead, rising from 11% last quarter to 17%. However, this eventuality ranks very low on the list of concerns and CFOs are not reviewing their plans to deal with stress associated with the Euro.

Digging deeper for protection
The warning signs from late 2012, that 2013 would prove another difficult year, are being borne out in performance that is below expectations and the adoption of yet more defensive measures. Appetite for risk, rising during most of 2012, has fallen back; increasing liquidity remains a high priority and CFOs are strongly favouring organic growth over expansion through acquisition. That said, over half the CFOs surveyed expect to see a rise in the level of M&A activity in the 12 months ahead, the highest number since mid-2011.

The outlook from Belgian CFOs is that there’s no respite from the challenges of negotiating difficult economic conditions. Demand remains depressed, results continue to fall short of expectations and CFOs are concerned that background factors, such as economic and fiscal policies, have added to their burdens.

Communication contact

Sophie De Meyer

Deloitte Belgium

+32 2 600 60 21


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