Dive Brief:
- A majority (57%) of CFOs surveyed expect that their finance departments will be smaller by 2026 as a result of AI adoption in the CFO’s office, according to a report released Wednesday by FP&A firm Datarails and a press release reviewed by CFO Dive. At the same time, 16% expect the number of roles to increase and 27% said there would be no change at all.
- Of those that expect finance departments to shrink as a result of AI-related changes, the largest share of respondents forecast headcount reductions of up to 30%. In terms of sector, those who work in finance, banking and insurance were the most likely to predict reductions at 59%, followed by tech and software at 57%, and health and pharmaceuticals at 44%.
- AI-powered algorithms and 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, Jonathan Marciano, vice president of brand and communications at Datarails, said in an email. “Our survey finds that in particular, CFOs consider that the financial processes most ripe for AI disruption are financial reporting , analytics, risk assessment, accounts receivable and invoice and billing,” he said.
Dive Insight:
While a decline in roles may imply a decline in headcount, Marciano said job cuts are not always the outcome. Yes, CFOs are increasingly looking at AI options to automate routine finance work. But rather than layoffs, this might simply mean they don’t need to hire new people due to increased efficiencies. Marciano said. Datarails has seen this happen firsthand.
“It is common for instance for Datarails customers to say that the use of the software was an alternative to doubling the size of the team. This is not unique to our software, but any finance software using AI to automate tasks to allow for more human strategic output that drives growth,” he said.
Indeed, in the long run there is a chance that jobs might actually increase, though these won’t be the same jobs as before, said Marciano. Positions involving manual, easily automated tasks will likely decline, but they may be replaced with those involving data engineering, AI prompting, data architecture, and master data management. Further, there will likely be more demand for those who can verify what AI produces, a task that will require experience and skill which cannot be so easily automated. Finally, there will also be more demand for those adept at advanced skills and with skills like storytelling, communication, leadership, and business partnering, he said.
However, there is already mounting evidence that AI is leading to job cuts at some firms: Marciano pointed to Dropbox, which last year laid off 500 workers in direct response to AI efficiency gains. Meanwhile, Intuit announced it was laying off 1,800 workers this summer.
Regardless of AI’s potential impact on the workforce, finance leaders are going full steam ahead on the technology. The survey found 70% of CFOs are set to invest in AI for the CFO’s office in 2025. AI has also emerged top of the CFO wishlist when choosing new software. The survey finds 21% of CFOs consider AI features as their top priority, followed by “price” (16%) and “analyst recommendations”.
The findings in the report titled “2024 CFO Sentiments survey: How AI is Changing Finance Departments,” are based on an August survey of 270 CFOs at U.S. companies with annual revenue between $50 million to $999 million.
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