Canadian CFOs bullish on business growth

But rising cost of labour, scarcity of talent greatest threats: Survey
|hrreporter.com|Last Updated: 05/15/2012

Canadian finance executives are taking an aggressive stance on business growth, according to a global survey released by American Express. Canada is among the most determined when setting growth targets, with 73 per cent of its senior finance executives seeking more aggressive growth for their business in 2012 — just shy of counterparts in the growth economies of India (75 per cent) and Argentina (85 per cent).

"Canadians are renowned for their non-aggressive nature and, until recent years, the same was true for Canadian businesses," said Paul Parisi, vice-president and general manager of global corporate payments at American Express Canada. "Canadian companies are revealing a new toughness in pursuing business growth more aggressively than many of their global colleagues."

Globally, finance executives continue to express restrained optimism about the prospects for economic growth, with 64 per cent reporting expectations for modest or substantial economic expansion over the next 12 months, found the American Express/CFO Research Global Business & Spending Monitor survey of 541 senior finance executives from the United States, Europe, Canada, Latin America, Asia and Australia.

In terms of when finance executives expect the global economy will gather strength, Canada sits just above the global average (46 per cent), with 50 per cent of its CFOs expecting the Canadian economy to return to robust economic growth this year. Respondents in the U.S. report a more extended growth horizon, with 75 per cent anticipating economic growth to gain traction at some point after the close of the fourth quarter.

Canadian CFOs are optimistic in their country's growth prospects, with 19 per cent expecting to see substantial economic expansion over the next 12 months. By comparison, just two per cent of their peers in the U.S. foresee substantial expansion during the same time period, found the survey.

Although 86 per cent of Canadian executives are somewhat or very confident they will reach their growth targets in the coming year, 44 per cent cite the rising cost of labour and scarcity of well-qualified employees as the greatest threat to their company's prospects over the next year. Nevertheless, 55 per cent plan on increasing their headcount in the coming year; about the same proportion (56 per cent) cite their primary motivation for hiring as acquiring specialized skills, expertise or experience.

"Strong talent is the fuel of good business," said Parisi. "The economic engine is running on full-steam in Canada, but attracting and retaining qualified employees weighs heavy on the minds of Canadian executives."

Canadian senior finance executives are also the highest globally (31 per cent) to report an aggressive approach to spending and investment over the next year — a sharp contrast to most senior finance executives around the world who collectively are taking a more conservative approach. About one-half (49 per cent) of them expect their company to take a modest approach to spending and investment to support top-line growth, followed by 35 per cent who expect their companies to control spending tightly.

"This trend is likely a reflection of the cash-preservation strategy we have seen among Canadian CFOs in the past year," said Parisi. "With many companies looking to stimulate growth, Canadian finance executives have plans to dip into their companies' cash stockpiles."

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