The “Brexit effects” of rising inflation and import costs, plus a slowdown in executive interest from Europe, are pressing concerns for the majority of UK finance chiefs.
More than 200 finance chiefs responded to a poll by Odgers Berndtson. Three quarters expressed concern about the fall in sterling and rising import costs – and over half saw this as an ongoing issue.
However, they were less clear about how their companies will respond. Whilst 20% said they would pass rising costs onto their customers, the majority (66%) also expect to absorb costs and reduce overheads.
The poll findings provide a sober backdrop to hopes of greater investment by UK companies in the short to medium term, despite efforts to promote the digital economy by the government and industry leaders like Jürgen Maier, CEO of Siemens UK, guest speaker at a recent dinner held by Odgers Berndtson's CFO practice.
“As we anticipate increased costs and complexity as the UK transitions to Brexit, it’s vital that UK-based businesses look longer-term to the future, invest in re-skilling their local workforce and identify growth opportunities both in the UK and global markets,” Mr Maier said.
“In these uncertain times, it’s important for financial leaders in business to be the catalyst for constructive collaboration with government - looking for investment opportunities, for example in the digital economy.”
Mark Freebairn, head of the CFO practice at Odgers Berndtson, said mounting concern over rising costs and inflation promised a more cautious business environment in which organisations look to hold steady rather than expand – reducing opportunities for more interesting roles in finance focused on growth.
“The challenge for finance chiefs is that most companies have already shed their fat and cut out excess cost in the years since the 2008 crisis,” Mr Freebairn said. “Investing in the digital economy with the greater use of artificial intelligence and robotics may appeal as a way to cut costs further but, if that stimulates significant layoffs at a difficult time, it risks undermining public confidence and stability.”
Finance chiefs also said they were “very or quite” concerned about the impact of tighter controls on immigration from Europe on their businesses. Almost 70% said they had seen applications slow from European candidates and worried about their company’s shrinking access to international talent – though the majority (80%) said this was far less of an issue in the finance function itself.
Odgers Berndtson global study of university technology research reveals dearth of UK specialists.