By GREGORY ZELLER //
The outsourcing of critical corporate functions – including cybersecurity and human resources – is on the rise, according to the latest Marcum-Hofstra CEO Survey.
Released this month, the second CEO Survey of 2024 by accounting giant Marcum LLP and Hofstra University’s Frank G. Zarb School of Business spotlights 251 mid-market CEOs contacted by phone during the last week of April. It comes fast on the heels of the year’s first Marcum-Hofstra CEO survey, which released in March and focused primarily on executives’ biggest concerns during election-dominated 2024.
The new survey – the latest in a long-running series dating back to 2019 – dives deep into the external issues plaguing executives at companies with revenues between $5 million and $1 billion.
Jeffrey Weiner: Margin master.
Among the most telling results: an across-the-board increase in outsourced work.
While 60 percent of respondents said they relied on outsourcing at about the same rate as always, more than a quarter of responding CEOs (29.1 percent) said their companies were relying more on outsourcing, with only 13 percent noting in-house business functionality on the rise.
Marcum Chairman and CEO Jeffrey Weiner said the increased focused on outsourced services was not surprising, “with talent in short supply and margins growing tighter.”
“The advantages of outsourcing are becoming clearer than ever,” Weiner noted. “Every day, more businesses are waking up to the reality that the specialized expertise of outside partners can relieve some of the day-to-day burden and enable organizations to concentrate their efforts where they’re most effective, which helps to drive growth and innovation.”
Concerns about a possible economic slowdown also weighed heavily on survey respondents – 45 percent said it’s on their minds – while 42.7 percent of CEOs cited interest rates and the cost of capital as external factors causing significant concern.
Expert opinion: The best talent is often found outside corporate environs, according to regional CEOs. (Source: Marcum-Hofstra CEO Survey)
The availability of talent (cited by 38.2 percent of respondents) leapfrogged past rising material and operational costs (35.1 percent) to become the second-most concern among respondents, reversing their positions from the previous survey, which was conducted in February for its March release.
The percentage of responding CEOs naming either as a top-three concern actually decreased from the prior survey, when 43 percent lamented rising costs and 39.8 percent bemoaned scarce talent.
But that’s not much of a silver lining: With another contentious presidential election on tap – including an unprecedented criminal trial (or trials) plaguing one of the leading candidates – “political uncertainty” was noted as the third-biggest external concern this time around, with 35.8 percent of CEOs worrying about Washington.
Janet Lenaghan: Leading role.
That intense focus on national leadership is critically important not only to today’s executives, but to the Zarb School of Business students who prepare and execute the survey on behalf of Hofstra University and Marcum, according to Zarb School Dean Janet Lenaghan.
“Understanding the changing tides of the business landscape is key to preparing tomorrow’s leaders,” Lenaghan said. “Through our partnership with Marcum LLP, we provide our MBA students with real-world learning opportunities that shape their perspective on strategic decision-making.”
Ultimately, the latest survey – which noted cybersecurity and marketing as the most-outsourced corporate functions (followed by accounting and IT) and labeled “superior expertise/access to talent” as the overwhelming reason why – proved to be a masterclass in the increasing importance of farming out functionality.
“In our increasingly interconnected world, the ability to adapt and respond to the ever-evolving market conditions is essential for business sustainability,” Andrew Forman, Zarb School of Business associate professor of international business and marketing and head of the school’s CEO Survey efforts, said in a statement. “The insights from our joint CEO Survey with Marcum LLP underscore the value of outsourcing as a critical tool for CEOs looking to harness external expertise while maintaining internal focus and agility.”
