Dive Brief:
- Eight out of nine CFOs face unusually high employee turnover, and 81% believe a shortage of labor will harm revenue growth, PwC said in a survey of Fortune 1000 and private companies.
- Six out of 10 CFOs (61%) believe staff are quitting to take better compensation elsewhere, with fewer than half (45%) predicting that the high turnover rate is transitory, PwC found in its survey, which it conducted in early August.
- Participants in CNBC’s Global CFO Council, all finance chiefs of U.S. corporations with more than $5 trillion in combined market cap, voiced the same concerns. Ninety-five percent in mid-August said it was difficult to find workers for vacant positions. By contrast, in the first quarter of the year, only 18% said so.
Dive Insight:
“More than three quarters of CFOs say compensation changes are impacting their forecasts, as many recognize that they might have to start paying more for talent in the future if the tight labor market lasts,” PwC said. Staff shortages have influenced the forecasts for completing existing work by 77% of CFOs, and the estimates for the ability to take on new business among 74% of financial executives.
The pandemic-induced labor shortage has created extreme hiring and retention challenges for many CFOs and their C-suite colleagues. The number of U.S. job openings rose to a record high of 10.1 million at the end of June, according to an Aug. 9 report by the U.S. Bureau of Labor Statistics tracking information dating to 2000.
Labor participation has slumped because of fears of the coronavirus, the appeal of comparatively generous unemployment benefits and the decision by some parents to stop working during a lockdown in order to care for their children, according to government and private-sector economists.
The Biden administration plans to allow emergency unemployment insurance to expire in many states this week. Still, some workers may not want to rejoin the labor force because of the spread of the Delta variant of the coronavirus.
The headwinds to hiring and retention will probably persist into next year, according to an Aug. 4-9 survey of 380 U.S. and Canadian companies by Willis Towers Watson.
Nearly three-out-of-four employers (73%) have trouble attracting employees, an increase from 26% last year and 56% during the first six months of this year, according to the WTW survey. Three-out-of-five employers have a hard time retaining workers, an increase from 15% last year.
In response to waning interest from job seekers, almost all CFOs (90%) surveyed by CNBC said their companies are raising starting wages and offering a slew of bonuses and perks.
A recent Salary.com survey found that 62% of organizations plan to increase base salaries in the next six months to attract both hourly and salaried employees, HR Dive reported. Athleisure retailer Lululemon, for instance, bumped its minimum wage from $15 to $17, and, amid a driver shortage, trucking and logistics company Cowan Systems provided each new hire a $15,000 bonus, Transport Dive reported.
Financial executives are confronting the staff challenge by taking a page from their pandemic playbooks and redoubling their digital transformation, PwC said. When employees quit, 58% of CFOs have used automation to help offset the loss of institutional knowledge.
Sixty-eight percent of CFO plan during the next 12 months to invest in analytics, the cloud and other technologies, and 67% are investing in cybersecurity tools and training, PwC said.
Nearly half (48%) of CFOs see an erosion in corporate culture as a challenge in the shift to a hybrid work model, with 40% of financial executives concerned about the loss of mentoring opportunities.
