Nearly two-thirds of CFOs interviewed predicted net profit growth at their organizations over the next 12 months, while 42% predicted growth of 6% or higher. The economic impact of the COVID-19 pandemic is waning, and they believe household wealth will continue to drive demand.

Fifty-eight percent expect continued challenges in attracting and retaining the right talent. On the other hand, the top area cited for potential cost cuts was human capital expenses related to employee headcount and compensation. In fact, 43% of CFOs say their organization is looking at this area for cost cuts. Meanwhile, nearly one-third of CFOs say they potentially could introduce layoffs or workforce reductions in the next six months.

"The companies that I'm talking to are all focused on cost reductions," Denham says. "Usually when people are focused on cost reductions, it's because they don't have a positive outlook on the future."

Among the other key findings:

• Cost optimization overtook cybersecurity as the prevailing area of concern. Specifically, 58% of respondents listed cost optimization among their top three areas of concern for the next six months, and 40% chose workforce rationalization as one of their top three concerns.
• Mergers and acquisitions activity could trend upward: The recent economic downturn has the potential to put the brakes on climbing valuations. Combined with the 72% of M&A professionals expecting deal volume to increase over the next six months, and M&A deal volume could increase, at least in certain industries.
• The percentage of CFOs who rated the supply chain as a top challenge was higher than in any of the previous six quarters. Specifically, 41% of respondents rated supply chain as a top three challenge.
• Supply chain challenges were followed by cash and liquidity (31%), the remote workforce (30%), cybersecurity risks (30%) and tech upgrades (29%) on the list of major challenges facing finance leaders.

Related: Less than half of CFOs are optimistic about the economy

These challenges reveal a notable trend — CFOs are trying to maintain healthy balance sheets by deciding just how much to invest in key areas, the report concludes.