What CFOs Need To Know (And Often Don't) About Company Workers

Forbes

5 days ago

There aren't many good things to have come out of the Covid-19 pandemic, but a new study of finance professionals from accounts payable software maker AvidXchange pinpoints one of them: Businesses increased their readiness for the unexpected. As businesses navigate an uncertain financial future, two-thirds say they are more prepared to handle it now than five years ago, when many normal flows of global commerce were disrupted by the virus.
Since the pandemic, companies have been investing more in strategic financial technology, including for automation, operational effectiveness, forecasting and productivity. Nearly three-quarters of respondents said technology implemented during the pandemic is helping them now, with seven in 10 reporting that technology is at least very important to their ability to continue to respond to market changes.
Just having the technology available doesn't mean that finance professionals are confident in what is coming next, however. The vast majority—86%—are concerned about the state of the economy, and half have deeper concerns about a potential recession. President Donald Trump's unpredictable financial policy, punctuated by threats of high tariffs that are often delayed and revised, has made planning difficult. Nearly half of all companies are reevaluating their budgets and discretionary spending. Three in 10 are using scenario planning and financial modeling to prepare for a range of outcomes.
So far, just over half have made moderate changes to their forecasts because of impending tariffs, but about a quarter that have been minimally impacted so far are monitoring them closely. Close to a fifth—17%—said the tariff threat has significantly disrupted planning and required major adjustments. This survey was taken in late spring—April to May—and many of the proposed tariffs seemed to loom much more in the immediate future. That effective date has shifted through the months, and is now set for August 1. However, one thing that hasn't changed since this survey was conducted is the unknown nature of the immediate financial picture, which has been a consistent fog over finance departments since January.
When companies are being prudent about their finances, one area where they often make cuts is personnel. However, many companies fail to share relevant people data between managers, HR and the finance department, leading companies to cut employees based on salaries alone—a strategy that sometimes will lead to vital knowledge and capabilities being cut, and ultimately losing more money in the long run. I spoke with Andrea Derler, principal in Research and Customer Value at AI workforce analytics platform Visier, about why companies need to share data to make better informed staffing cuts in difficult times. An excerpt from our conversation is later in this newsletter.
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ECONOMIC INDICATORS
Stocks climbed to fresh all-time highs on Monday. Michael Nagle/Bloomberg
What uncertain economy? Looking at the stock market, the U.S. economy appears to be making fast progress with nothing in its way. The S&P 500 shattered records with two all-time highs in the last week—Monday and Thursday—while the Nasdaq also set a daily record on Monday. Optimism in technology, especially AI, is buoying the markets, with Alphabet, Amazon, Apple, Verizon, Qualcomm and Broadcom leading Monday's rally. Analysts are mixed on whether the rally will continue, with strategists at Goldman Sachs, Wells and Fargo projecting more growth this year. Analysts at JP Morgan Chase and Evercore ISI are projecting a decrease.
Positive economic data has helped boost the markets. Unemployment claims hit 221,000 last week, down 7,000 from the week before, and June's retail sales were up 0.6% over May, writes Forbes senior contributor Pamela Danziger. Additionally, 83% of S&P 500 companies reporting earnings so far this quarter exceeded expectations. Alphabet and Tesla, two of the 'Magnificent Seven' tech companies, will report their earnings later this week.
Despite all of these positive numbers, however, tariffs are still waiting in the wings, writes Forbes senior contributor Erik Sherman. According to President Donald Trump's latest deadlines, many of them will start on August 1, and could begin to impact the prices companies and consumers pay soon thereafter. Countries and companies are working to figure out how to mitigate the majority of the impact when it comes, the Washington Post reports.
Meanwhile, Forbes senior contributor Jim Osman writes that a distressing sign is emerging from consumers: 5.1% of all car loans are delinquent, marking a 15-year high in subprime loan delinquencies. Osman writes car loans tend to be the last payment Americans skip. When times are tight, they may miss a credit card, utility, mortgage or rent payment, but vehicles tend to be the last thing they will risk losing. Osman writes that credit stress is spreading as household debt increases, while credit card and buy-now, pay-later companies tighten their standards.
POLICY + REGULATIONS
President Donald Trump holds up the just-signed GENIUS Act with Speaker of the House Mike Johnson (R-La.) applauding next to him.The U.S. has regulations in place to govern some types of cryptocurrency. Last week, President Trump signed legislation to regulate stablecoins, which are cryptocurrencies tethered to the value of assets like the U.S. dollar. The new laws put guidelines in place for banks and other entities to issue stablecoins.
The new law has been hailed as a landmark moment for the crypto industry, writes Forbes senior contributor Charles Lloyd Bovaird II. Analysts told him that with regulations in place, there will be more momentum to establish and invest in cryptocurrency, both for individual investors and corporate entities. And several companies are looking into the issue. The Wall Street Journal reported last month that Walmart and Amazon are considering launching their own stablecoins as a way to circumvent traditional payment systems.
With the ink barely dry on the new law, the earliest impacts have come in the form of runaway valuations on Bitcoin and Ethereum stablecoins. Prices for these tokens have skyrocketed over the last week. Two other Republican-backed bills that would provide more regulation on the industry are currently before the Senate. They would prohibit the Federal Reserve from issuing a central bank digital currency and divide regulatory jurisdiction for digital assets between the Commodity Futures Trading Commission and the Securities and Exchange Commission.
NOTABLE NEWS
Illustration by Samantha Lee for Forbes; Images;; Devonyu-Getty Images; Ali Çobanoğlu-Getty Images; Joe_Potato/Getty Images; lavsketch/Getty images;It may be about time to take another look at office perks. In Trump's sweeping domestic policy bill—dubbed the One Big, Beautiful Bill Act—the 50% tax deduction on food and drinks in the office expires on January 1, writes Forbes' Kelly Phillips Erb. Office coffee, snacks and employee meals got a 50% tax break under Trump's signature 2017 financial policy bill, but the perk did not get renewed in the latest policy bill. (Unless you work on a fishing vessel in Alaska or a restaurant, that is.) The end of the deduction will raise $32.5 billion over the next decade, Erb writes—a relatively small increase in revenue, considering the bill includes tax cuts adding up to $4.475 trillion in the next decade.
The question now facing companies is whether to continue stocking the office kitchen with goodies. A 2023 survey found that eight in 10 employees said catered meals encouraged them to come into the office, and 98% said free meals at work make them feel appreciated. But considering the other internal cost issues that may be at play in 2026, it may be challenging for companies to preserve a non-deductible employee perk.
OFF THE LEDGER
Why Data Blind Spots For CFOs Lead To Ineffective Layoffs
Andrea Derler, Visier Principal, Research and Customer Value. Visier
When it's time to cut costs, financial leaders typically begin by looking at a company's largest cost center: personnel. But the CFO's office and the personnel department don't always have the same data—down to agreeing on total employee counts—and the information the CFO has is usually based on numbers and location, missing important context like job functions and company plans for further growth.
I spoke with Andrea Derler, principal in Research and Customer Value at AI workforce analytics platform Visier, about how everyone in the company can align on its workforce. This conversation has been edited for length, clarity and continuity.
In an ideal business situation, what kind of access would the CFO have of personnel data?
Derler: To begin with, what type of data does the organization have? How is it currently processed and integrated? I'm exaggerating here, but she's probably not going to be interested in seeing a spreadsheet with 300,000 employees. Ideally, it's in a system where it's easily accessible to the C-suite. The better it is integrated and actually prepared for results and insights, the easier it becomes. These people don't have time to play around with the system for half an hour to get to one insight. What's our headcount? Where's the diversity in terms of women in leadership positions? How does our projected headcount actually affect our ability to meet our targets next quarter? That needs to be really easily integrated.
In terms of the detail and what they see, hopefully they'll work with the relevant IT and CHRO teams to understand: Can I have access to this and that because I need it for this and that? The collaborative aspect of all of these decisions is increasingly high nowadays because it's technically possible: Understanding and negotiating access to certain data points and certain business units is really a collaborative effort.
There's a basic set of metrics that are always relevant. We need to know who is going, who is coming in the organization, particularly for workforce planning. You always need to know who is where. Engagement may not be the most important one for the CFO because it's further away from proof to say it really affects the bottom line. Closer to that would be how many people do we have? Do we have the right skills, and how is it going to affect our projected revenue next year?
What are some of the bigger things that go wrong in companies because the CFO doesn't necessarily have access to good data from HR?
We have a massive data set of [about] more 30 million employee records of global industry data. We look at that data constantly. Two years ago, we studied layoffs—reduction in force, turnover, resignation. Most companies have some type of a number we can see in our data. Then I interviewed six CHROs to understand what the decision making process around layoff positions look like?
If there's a very short term calculation: I'm going to save this much if I let 10% go in the next three months, what's sometimes missing? Sure, you have the cost savings in the short term, but what's sometimes neglected is what the actual long-term cost is. I'm going to let go 10% now because I think we don't need them anymore, and currently I'm going to have to save some costs. Sometimes, what's not happening is thinking ahead 12 months. We want to grow again after the difficult economic times. Now, I'm going to have to rehire individuals or find new replacement employees. We know that hiring new employees is generally much more expensive than keeping existing employees and helping them either internally to find different roles or reskill them.
There's a lot of academic research and also industry research that found that layoffs most of the time are not really financially making sense because the planning capabilities don't always exist. If the CFO knew how much it's going to cost their company to rehire, knowing it may cost a lot more, giving us another headache in two years time, [they may advise against it]. They had only the financial data and said, 'Oh man, we are spending way too much on wages. We're going to have to make some cost savings.'
That's for lack of data integration. That's for lack of the ability to collaborate and look at the same data set and do thorough scenario planning, very much to the detriment, not only of the employees who are being let go, but even financially, it doesn't make sense most of the time.
What advice would you give to a CFO who wants to make the best financial decisions in the long run for their company when it comes to personnel, and feels like they need to have more access to information?
The first thing, very practically, I would recommend that they would go to their counterparts— CHRO or IT—and find out how solidly set up they are from a technology and analytics perspective in terms of what do we have? How are we set up? Are we still working on spreadsheets? What questions can you answer for me here and now—not tomorrow, next week, not in two months, because we still have to do all the calculations manually. That would be an expectation that the CFO can reasonably have, to say, 'Well, if we want to make good decisions, that's what we need.'
Secondly, gauge the appetite. If it's not in place, make a business case for it and say, 'I will be able to make more solid financial decisions if I have the solid HR data behind me. I can make a decision faster and be more agile. That's a big selling point. Currently, with all that's happening in the economy, it's very hard to plan ahead. You need agility and the ability to look something up today. Find out what's in place. If nothing's in place, what's the appetite, and who are the stakeholders that I need to engage with within the company?
The third important task that they could do by themselves is list what's missing for me right now in terms of people data. These are the table stakes five questions that I need to be able to answer so I can, as a CFO, make meaningful decisions, or help at least advise the board or others on those decisions.
COMINGS + GOINGS
Energy services provider Halliburton tapped Stephanie Holzhauser as its new senior vice president and chief accounting officer, effective July 16. Holzhauser was an intern with Halliburton before joining the firm in 2004, and she succeeds Charles Geer Jr. who is leaving the company.
tapped as its new senior vice president and chief accounting officer, effective July 16. Holzhauser was an intern with Halliburton before joining the firm in 2004, and she succeeds Charles Geer Jr. who is leaving the company. Utilities provider Southern Company promoted David P. Poroch to its executive vice president and chief financial officer role, effective July 31. Poroch currently works as senior vice president, comptroller and chief accounting officer, and he will succeed Daniel S. Tucker, who is retiring after more than 25 years with the firm.
promoted to its executive vice president and chief financial officer role, effective July 31. Poroch currently works as senior vice president, comptroller and chief accounting officer, and he will succeed Daniel S. Tucker, who is retiring after more than 25 years with the firm. Luxury retail group Saks Global appointed Brandy Richardson as chief financial officer, effective August 18. Richardson joins the company from Tailored Brands, Inc., and will succeed interim chief financial officer Mark Weinsten.
STRATEGIES + ADVICE
Businesses do want to make money, but your success and longevity may depend on your ability to do something else: create value for your customers. Here are some ways to make a shift away from pure profit, but possibly a better market position.
If you want to add some leadership insight to your summer reading list, here are six books to help you reflect on your shortcomings and learn how to lead your team more effectively.
QUIZ
Last week, a TV network canceled a top-rated show because it said it was losing money—though critics have wondered if the cancellation had more to do with President Trump's dislike of it. Which show is it?
A. 60 Minutes
B. The Daily Show
C. The View
D. The Late Show
See if you got the right answer here.