CFOs are focused sharply on recruitment and staff retention - and increasingly worried about both.

In Grant Thornton International's Q2 2021 CFO survey, the firm found that nearly two-thirds of CFOs are worried that talent shortages could impair their ability to meet short-term strategies. A similar percentage are worried about controlling compensation and benefits costs. These were the leading findings of the firm's survey of
239 CFOs and senior executives at companies with annual revenues ranging from $100 million to more than $1 billion.

Two-thirds of CFOs reported being worried that talent shortages could impair their ability to meet their strategies

According to the report: Companies are facing a new and different war for talent, one in which employees are reluctant to surrender increased flexibility gained during the pandemic and in which talent scarcities are giving them increase leverage as they consider their employment options. With job search numbers at historic lows as the economy continues to add new jobs, they have reason to be concerned.

• 56% percent of CFOs chose attracting and retaining key talent as the most important human capital priority for the next 12 months
• 68% strongly agreed or agreed that their organizations would experience a possible shortage of human talent that might risk achievement of short-term strategies

In the face of a global crisis of applicants - with job applications dropping 70% - are CFOs listening?

They do seem to be leaning in - in some cases - to recruitment investments, with 40% of recruiters reporting budget increases year-over-year.

Despite these realities, many CFOs seem reluctant to adopt to the new realities of work. This may cost them.

“There are clear indications that CFOs are concerned about the looming war for talent. Yet there are also conflicting messages on taking steps to actually fix it,” said Tim Glowa, Grant Thornton principal ofHuman Capital Services. “A third of organizations are saying people are expected to be back in the office. That’s inconsistent with the data on what employees are looking for.”

Employees increasingly want flexibility. A recent Cangrade study found that 56% of workers thrive in hybrid environments.

Companies who require in-office work only may be losing out on as much as 70% of their potential talent pool, in a time when talent applicant scarcity is rampant.

One PwC survey found 65% of workers were looking for a new job as of August, with their top reasons including negotiating for a better salary, accessing new benefits and having more workplace flexibility, such as the ability to work remotely full-time or on a hybrid schedule. According to the survey: when it comes to offering incentives that employees want most, they’re falling short in two key areas: benefits and compensation. This employer-employee tension compounds the challenge facing companies eager to redesign work. Rising inflation, the surging delta variant and tension over vaccines, masks and shifting return-to-work plans are creating extra uncertainty.

In August, in the face of these headwinds, Morgan Stanley's CEO warned staffers they could face a pay cut if they aren’t back in their offices by Labor Day or if they’re living on a New York City salary but have moved to work remotely elsewhere. Multiple Wall Street firms followed suit.

• While the Delta variant is spreading quickly in much of the country, including New York City, several investment banks said they were moving forward with plans to return employees to the office
• Executives at J.P. Morgan and Goldman Sachs have publicly questioned the value of remote work, arguing that it leads to a less collaborative and creative employee base

In contrast, the US federal government is being urged to maintain its hybrid strategy.

Benefits, flexibility matter: are employers getting the message?

Study after study is proving out the importance of benefits - particularly for US workers, healthcare - to potential employees (as well as to employee retention). CFOs seem to be only getting part of that message as they look to limit total rewards, and consider moving to some sort of defined-contribution model for health plans.

“If you’re trying to control total rewards, you’re probably not going to be spending more money on them,” Glowa added.“That means you have to rely on some other differentiator to attract people. But when you’re struggling for talent, it’s not the time to be watching your pennies.”

Hybrid or remote work is another area where provisions are evolving. According to SHRM’s 2020 employee benefits report, 78% of employers have shifted and expanded their telework options since 2019. It’s perfectly reasonable, especially in light of the recent 18-month stretch that proved most of us can do our jobs effectively from anywhere, to ask for home working days. And it’s not just about whether you can be physically out of the office, but whether the company has benefits that help you thrive outside it.

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