Dive Brief:
- Seventy-two percent of CFOs and HR leaders forecast a rise in business revenues in 2021, while 62% plan for an increase in EBITDA, according to a survey by AchieveNEXT, a provider of peer advisory networks for business.
- Just over half of the survey respondents plan to spend more on people and technology during the next 12 months, an increase from 35% during the third quarter of 2020, AchieveNEXT said in its 2021 CFO-CHRO Sentiment Study.
- The survey respondents lead 300 emerging and middle-market businesses in industries ranging from financial services, telecommunications and health care to manufacturing, real estate and software.
Dive Insight:
The upbeat survey is one of a few signs of business optimism despite the persistence of COVID-19. U.S. equity markets hover near record highs. Also, finance chiefs, bankers and deal-makers recently shared a bright economic outlook that they attribute in part to the vaccination effort against the virus, according to the Wall Street Journal.
Amid such optimism, about a quarter of the companies surveyed by AchieveNEXT said M&A will be a core component of their growth strategy in 2021, reinforcing a trend that began late last year. Deal-making volume rebounded to a record in North America during the fourth quarter, according to research by Willis Towers Watson.
Still, for all of 2020, the pandemic pushed down total global transactions to the lowest level since the mortgage finance crisis. Companies worldwide completed 674 deals valued at more than $100 million last year, a 12.9% decline compared with 2019 and the lowest transaction total since 2009, according to WTW.
Beyond M&A, nearly 75% of respondents said diversity, equity and inclusion (DEI) is “somewhat to very critical” to the future financial performance of their enterprises. An increasing number of companies are investing in DEI programs.
Efforts to promote DEI align with efforts to encourage companies to disclose data on environmental, social and governance (ESG) issues.
Hester Peirce, a commissioner at the Securities and Exchange Commission, said Wednesday any government-mandated ESG disclosures should be tailored to specific industries rather than sweeping standards applied to all sectors, according to the Journal.
Referring to one segment of their stakeholders, many respondents to the AchieveNEXT survey acknowledged weaknesses in their customer relationship strategies.
One in three said they currently have no plan for developing and growing such relationships, and 60% said they lack the necessary data.
Eighty-seven percent of respondents said they plan to put more effort into developing and managing relations with customers.
