Who would be a CFO in 2023?

The Chief Financial Officer usually provides the window through which companies view success. However, CFOs are increasingly being held responsible for the metrics. In 2023, don’t shoot the messenger.

2023 looks set to be a difficult trading year. The CFO's challenge will be to keep a tight grip on costs as inflation rises while not limiting opportunities for greater efficiency.

We surveyed both Chief Executives (CEOs) and Chief Technical Officers (CTOs) to discover their greatest concerns for 2023. The purpose was to help CFOs focus on areas likely to deliver bad metrics.

The big issue for 2023 is staffing

Our research showed that CEOs rated staff attraction and retention as the greatest challenge for 2023 (43% of 112 respondents).

UK vacancies in the information and communication sector have tripled from approximately 13,000 to over 79,000 since 2019 (Source ONS). 55% of UK private and public sector workers say their employer is experiencing a digital skills shortage, according to new research from Virgin Media O2 Business and Censuswide.

That means it’s harder to attract the right IT staff, they have become more expensive, and you will have to pay more for recruitment and advertising. According to research by Oxford Economics and Unum, the average cost of turnover per employee earning over £25,000 a year is £30,614. So, the cost to replace three such employees in one year will be close to £92,000.

And once you have them, you will have to maintain training and good salaries or working conditions to keep them. It’s no comfort that the IT department has the third highest staff turnover in the UK. IT management can throw up more unexpected budgetary spikes than any other department.

Cyber fears and costs are on the rise

When we researched CTOs and asked about their greatest challenge for 2023, unsurprisingly, it was cybersecurity (33% of 197 respondents).

IT resources are crucial and an increasingly tricky area of budget allocation. Although there are predictable areas of expenditure (e.g. software or server upgrades), there are also unpredictable costs – such as a cyber-attack or technology failure.

The unpredictable costs can be high for a small firm. As we discussed in a recent blog, ‘We reveal the damage from UK cyber attacks‘, the mean cost of a cyber breach to small businesses was £3,080, rising to £19,400 for larger enterprises.

Add to that the average indirect costs of £3,770 when staff could not work, plus the indirect cost of lost files or intellectual property. These are all visible costs; the invisible costs include damage to reputation and compliance failure.

You could argue that these direct and indirect costs have been with us for years – although the likelihood of you being the victim of a cyber-attack will increase in 2023. In 2022, 39% of UK businesses were subject to at least one cyber attack that they knew about*.

Outsourcing the headache

It’s widely accepted that organisations should concentrate on their core business to remain competitive. So (logically) if IT is a headache, give it to an expert.

Outsourcing means you can rely on an experienced business partner to provide the IT resources you need when you need them. You can dovetail with them to provide as much or as little support as you need at an agreed monthly cost. Turning an acute CapEx liability into smooth, budgeted OpEx payments.

By removing the spectre of unexpected IT costs, you can help your CTO accurately budget to take advantage of new technologies as your business needs dictate.

Regarding IT staffing, outsourcing means an end to unexpected bills due to churn, illness, holidays or maternity/paternity leave. It means you are not subject to surges in cost through redundancies, seasonality or unexpected events.

Many businesses spend a lot of time, money and resources on maintaining their cybersecurity and still don’t get it right. Maintaining the skill sets necessary to keep pace with organised crime and malicious code is costly and labour-intensive.

Spreading the cost through an MSP that has the expertise, the bandwidth, the diversity of skills and the up-to-date anti-virus solutions to maintain your cybersecurity makes sound financial sense.

*Figures sourced from Gov.UK Cyber Security Breaches Survey 2022