Deloitte Southeast Asia CFO Survey 2015

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64 per cent of CFOs less confident of having the talent to meet business objectives

Deloitte Southeast Asia CFO Survey 2015

SINGAPORE, 22 March 2016 — The sentiments of Chief Financial Officers (CFOs) in the region appear to reflect rising concerns amidst the faltering performances of major economic zones. The 2015 Southeast Asia CFO survey report, “The CFO as the Talent Champion”, polled 91 CFOs between July and August 2015 which revealed that more and more CFOs are feeling less optimistic of their business’ financial prospects over the past years. 39 per cent of the respondents are optimistic about the financial prospects of their companies, which is balanced with the 36 per cent of CFOs who feel doubtful about their companies’ prospects as compared to three months ago.

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More than three-quarters of those who feel less optimistic pointed to external factors as the cause of their concerns which include the sharp decline in the Malaysian ringgit and recent terrorist attacks in Bangkok. 75 per cent of CFOs surveyed feel that the pressure of external uncertainties facing their businesses is high.

Talent agenda

Securing high-performing talent may be the most critical factor to the success of a CFO and attaining the overall goals of the organisation. In today’s world, the talent agenda has become a top priority for CFOs.

Despite an increase in hiring expected in the coming year, 64 per cent of CFOs surveyed are not very confident that they have the talent required to meet business objectives. To combat potential shortages, many CFOs surveyed say they are working to better compete for young professionals and top graduates through enhancing their employer value propositions, better development opportunities, and even a revamp of their HR departments and talent management approaches.

The survey explored the performance and capability gaps of the talent in the Finance functions, as well as in the overall organisations in Southeast Asia, and how well the CFO and talent leaders have cooperated to recruit and retain the necessary talent to drive their corporate strategies. “Our study shows that there is a need to align the goals and priorities of the C-level executives and the Human Resources (HR) function, and build towards a common talent agenda for the organisation,” says Nicky Wakefield, Deloitte Southeast Asia Human Capital Advisory Leader.

Key differentiators in talent practices

Taking a closer look at talent practices between leading performing companies and the rest of the organisation, the largest disparity surveyed is the adoption rates for mentoring and coaching. 69 per cent of performance leaders practise mentoring and coaching, while only 43 per cent of the other respondents have implemented this practice (yielding a large difference of 26 per cent). Performance leaders are defined as CFO respondents (46 per cent) who rated their three-year business performance as “successful” or “very successful” over the past three years.

The second largest disparity between performance leaders and the rest of the organisations surveyed (a difference of 22 per cent) is having senior leadership involvement in leadership development efforts. This is also the fifth most popular talent practice amongst performance leaders (69 per cent adoption rate).

On leadership development efforts to be truly effective, Ms Wakefield stresses that involvement by senior leaders must go beyond simply showing support by kicking off and helping to communicate an initiative. “Real involvement means ‘leaders teaching leaders’, by playing an active role in the design, delivery and syndication of leadership programs (modelling leadership after the formal program ends),” explains Ms Wakefield.

“Our experience has shown that involvement by senior leaders, including CFOs, throughout the program process significantly increases retention and application of learning, as well as participant satisfaction,” adds Wakefield.

Another significant differentiator in talent practices which is also the most popular talent practice among performance leaders is the implementation of the performance management process (over 75 per cent of respondents are currently practicing this) to drive feedback, development and business values.

Performance of talent

Findings from the recent pulse check found that performance leaders reported stronger talent in every skill area included in the survey. The greatest difference between performance leaders and the rest were reported in the areas of strategic management, drive for results and people leadership. “Drive for results” is ranked as the most important skill for talent in the organisation in the next five years while, somewhat surprisingly, “influencing stakeholders” and “operational management” are a few of the least important traits that business leaders are looking for.

“The relative importance of these skills over others, such as operational management and functional expertise, reflects a realisation that ‘business as usual’ is no longer an option. Strong technical skills and operational management are no longer enough to drive sustainable growth in Southeast Asia. Growth will require talent with more advanced skills in driving results, strategy, innovation and leading people,” says Indranil Roy, Global Head of Strategy and Asia Pacific Leader at Deloitte.Leadership.

CFO outlook over the next 12 months

Contradicting the dwindling optimism, CFOs are still relatively positive on their expectations for revenue growth. 68 per cent estimate an increase in their revenues this year. 34 per cent of CFOs expect operating margins to decrease in the next 12 months, which seems to either indicate an anticipation of higher costs, or companies’ intentions to leverage on the economic slowdown to grow their business. 49 per cent of CFOs in the region envisage M&A activity to increase, of which 30% are businesses in the Financial Services industry. Last but not least, 46 per cent of CFOs are looking to increase their headcount this year.

To view the full results and analysis of Deloitte Southeast Asia CFO Survey 2015, please click here.

About the Deloitte Southeast Asia CFO Survey
The Deloitte SEA CFO Survey targets the CFOs of major companies in Southeast Asia. This is the third CFO survey conducted in this region. The survey was open for one month commencing 13 July 2015 and was completed by 91 CFOs, representing a wide range of industries.

All participating CFOs have agreed to have their responses aggregated and presented.

Please note that this is a “pulse survey” intended to provide CFOs with bi-yearly information regarding their peers’ thinking across a variety of topics. It is not, nor is it intended to be, scientific in any way. This report summarises findings for the surveyed population but does not necessarily indicate economy- or industry-wide perceptions or trends.

About the Deloitte Southeast Asia CFO Program
The CFO Program brings together a multidisciplinary team of Deloitte leaders to help CFOs stay ahead in the face of growing challenges and demands. The Program harnesses our organisation’s broad capabilities to deliver forward thinking and fresh insights for every stage of a CFO’s career – helping CFOs manage the complexities of their roles, tackle their company’s most compelling challenges, and adapt to strategic shifts in the market.

To find out more about the CFO Program, please click here.

2015 Southeast Asia CFO survey report
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