Diving brief:
- A majority (57%) of CFOs surveyed expect their departments will be smaller by 2026 following the adoption of AI in the financial director’s officeaccording to a report published Wednesday by the company FP&A Datarails and a press release reviewed by CFO Dive. At the same time, 16% expect the number of positions to increase and 27% believe there will be no change.
- Among those who expect finance departments to shrink due to AI-related changes, the largest share anticipate workforce reductions of up to 30%. In terms of sector, those working in finance, banking and insurance were most likely to predict reductions at 59%, followed by technology and software at 57%, and healthcare and pharmaceuticals at 44%. %.
- Algorithms and AI-based systems can perform repetitive tasks with great speed and accuracy, eliminating the need for manual intervention: for example, they can take over tasks such as data entry, said Jonathan Marciano, vice president of brand and communications at Datarails. an email. “Our survey reveals that CFOs in particular consider financial processes most prone to AI disruption to be financial reporting, analytics, risk assessment, accounts receivable and invoicing,” he declared.
Dive overview:
Although a reduction in positions may mean a reduction in headcount, Marciano said job cuts are not always a consequence. Yes, CFOs are increasingly turning to AI options to automate routine financial work. But rather than layoffs, it might just mean they won’t need to hire new people due to increased efficiency. Marciano said. Datarails has witnessed this first-hand.
“It is common, for example, for Datarails customers to say that using the software was an alternative to doubling the size of the team. This is not unique to our software, but to any financial software that uses AI to automate tasks to enable more human, strategic production that drives growth,” he said.
Indeed, in the long term, it is possible that the number of jobs will increase, although they will not be the same jobs as before, Marciano said. Positions involving manual and easily automated tasks will likely decline, but they may be replaced by those involving data engineering, AI enablement, data architecture and master data management. Additionally, there will likely be more demand for those who can verify what AI produces, a task that will require experience and skills that cannot be as easily automated. Finally, there will also be more demand for people with advanced skills and with skills such as storytelling, communication, leadership and business partnerships, he said.
However, there is already growing evidence that AI is leading to job losses in some companies: Marciano pointed to Dropbox, which laid off 500 workers last year in direct response to AI efficiency gains. In the meantime, Intuit announced it laid off 1,800 workers this summer.
Regardless of AI’s potential impact on the workforce, financial leaders are moving full speed ahead in the technology space. The survey reveals that 70% of CFOs are ready to invest in AI for their office in 2025. AI also appeared at the top of CFOs’ wish lists when choosing new software. The survey reveals that 21% of CFOs consider AI capabilities their top priority, followed by “price” (16%) and “analyst recommendations.”
The conclusions of the report entitled “2024 CFO Sentiment Survey: How AI is Changing Finance Departments,» are based on an August survey of 270 chief financial officers of U.S. companies with annual revenue between $50 million and $999 million.