CFOs Are At Risk Of Burnout As Talent Shortages Rise

Executives, investors, and the organizations they are associated with exist in a world where peak performance and transformational impact are the expectation in today’s fast-paced environment. The pressure to execute remains intense where one can easily become inundated by the fallout that comes with high demands.

Studies show that the art of excelling in high-pressure environments is an ongoing challenge faced by top performers across various domains, affecting corporate executives as well as their talent. A recent survey commissioned by Avalara, a tax automation software company, found that many CFOs face significant talent shortage and burnout of existing staff in the U.S. and UK.

Key findings revealed that 81% of CFOs reported a talent shortage in accounting roles, while nearly half (49%) of CFOs surveyed reported the lack of headcount needed for forward-looking financial operations.

“Finance executives must balance their company’s business dynamics while navigating unpredictable waters, given the pressures of high inflation, growing talent gaps, and concerns over an impending recession,” said Ross Tennenbaum, chief financial officer at Avalara.

About 47% of CFOs surveyed said that employee burnout around hours and menial tasks, as well as accounting and finance professional changing careers were believed to be why the talent pool will gradually shrink overtime. But as technology continues to evolve, finance chiefs can begin to leverage these advancements to become more agile and efficient in the way their teams automate repetitive tasks.

“The rise of artificial intelligence will help finance executives around the world find new ways to drive savings and help make their current teams more energized by streamlining and automating repetitive accounting and financial tasks to help manage the accountant talent shortage gap that the majority of CFOs are facing,” Tennenbaum stated further.

But, while finance executives continue to face significant talent shortages within their accounting and finance teams, high-growth CFOs are themselves increasingly susceptible to burnout as rising geopolitical tensions, inflation, and high-interest rate environments continue to impact their abilities to make strategic decisions.

Why Executives Are Facing Burnout And How To Avoid It

Findings from a different study revealed that 92% of CFOs are frustrated as their finance teams spend an average of 14 hours each month preparing ad hoc reports and visuals, while it takes up to three months for 78% of companies to prepare their budgets, according to Financial Executives International.

CFO exhaustion was also revealed to be exacerbated by manual work processes. About 41% of survey respondents said that Financial Planning and Analysis (FP&A) processes were manual, absorbing approximately ten hours a week of highly skilled FTEs, notwithstanding CFO work hours as well.

Dr. Joshua Klapow, a renown clinical psychologist launched MentalDrive in 2002, which then became the official name for his umbrella of work in 2020. Through his intense, asynchronous coaching programs driven by a single, behavioral science theme, Dr. Klapow arms his clientele of professional athletes, investors, and executives with evidence based psychological tools and methods that keep them from being thrown off by the fallout that comes with intense pressures.

While reducing the burden of manual labor through digital transformation of the finance function will certainly help to alleviate pressures that lead to burnout, CFOs can also utilize psychological strategies and evidence-based techniques to avoid burnout, allowing executives and their teams to be better equipped and empowered to perform at their peak under pressure.

How Executives Can Be Empowered To Perform At Their Peak

In the finance sector, success or failure is measured by outcome, not intention. By learning how to separate an emotional reaction to pressure situations from the objective factors of those situations, executives can quickly navigate stress with a mindfulness framework, self-efficacy, and mastery to assess their level of perceived pressure and stress, while simultaneously assessing the objective severity of any given situation, drawing on methods from dialectical behavioral therapy, a type of talk therapy for people who experience emotions very intensely.

Navigating Pressure And Stress Situations With A Mindfulness Framework

According to Dr. Klapow, acknowledging feelings of pressure, stress, and thoughts of doubt are essential to help avoid burnout by learning through practice that those feelings and thoughts will be present, but will also pass.

“Mindfulness practices enable executives to think and feel distracting thoughts and emotions but not get stuck with them as all emotions and thoughts are fleeting,” says Dr. Klapow. “Executives must be able to ward off the mental errors, emotionally driven decision making, and physiological dysregulation that interfere with peak performance. Executives can learn to perform in pressure situations from a place of comfort and intentionality versus reactivity and defensiveness.”

Self-Efficacy and Mastery

While years of training and experience have created automatic reactions that aren’t often successful, executives should remind themselves frequently of what they know how to do—not to be over confident, but to accurately allow their foundational skills as masters of the business to take over and communicate that mastery to their teams in times of pressure.

“Executives face persistent pressure to perform at peak levels, are routinely making critical decisions with significant impact on their careers as well as organizations they are working with or for, and are working with windows of opportunity that are typically small. They exist in a high risk, high reward environment where peak performance is absolutely essential.” Dr. Klapow says.

Common Psychological Obstacles That Hinder Peak Performance

When executives let emotions dictate their reasoning, they frequently misjudge the needed actions to successfully navigate a challenge.

Emotional Reasoning Fallacy

When pressure is high, emotions become front and center. They become the most prominent part of one’s consciousness. The internal dialog of “I feel (insert emotion), therefore this is why this is happening to me” is often a fallacy, according to Dr. Klapow.

“In order to perform at their highest levels, executives must balance intense emotions with the fact that those emotions do not always match up to the reality of the situation,” says Dr. Klapow. “There may be intense anxiety over the closing of a deal, the execution of a specific play, or the navigation of a routine board meeting. The anxiety is real, but the situations are not as dire as the feelings might dictate. When the emotions no longer dictate the call to action, then emotional reasoning fallacy is neutralized,” Dr. Klapow explained further.

Compartmentalization

Executives often rely on the defense mechanism of compartmentalization as a way to perform under pressure, though it is a short term and often failed approach. However, not acknowledging worries, fears, and insecurities while denying their existence creates anxiety that keeps the mind from performing optimally.

“The attempt to push everything out of the way is a very short-term solution. Anxiety grows when it is not labeled. Calling out the challenges with work, home, school etc., and learning how to manage the anxiety and distress associated with these challenges allow executives to perform well under any situation, not just situations where all the stars align, and they are feeling optimal,” Dr. Klapow explained.

“The Best” Performance Expectation

Executives often believe that they must perform at their best to succeed. However, setting “best” as the only acceptable outcome is an irrational belief system because there is a distinction between best effort and best performance.

“When we set ‘best’ as the criteria, we often fall short because our best performances are rare (otherwise they wouldn’t be the best). An executive expects their efforts will produce good and great can rely on those to win. Expecting your best performance versus your best effort sets you up for frustration and failure. A executive who expects ‘the best’ will often fall short.”

Instead, executives should work to improve performance across all aspect of the business such that their “average” performance levels improve.

“Every one of these evidence-based factors are applicable across any situation where challenge is present and peak performance is desired. Learning to lean into emotions, separate them from the situation, trust and rely on skill building, and accepting that failure is a part of life allows people to tap into their true potential in every aspect of life,” says Dr. Klapow.