- Just over half of CFOs (54%) surveyed cited hiring and retaining staff as the most difficult task over the next 12 months, according to a July Gartner study which asked 234 finance chiefs to name the top three challenges ahead.
- Forecasting was the second-most cited task with 36% of finance chief respondents ranking it among the top three most arduous items on their to-do lists, followed by “cutting the right costs” (35%), pricing (27%) and planning staffing levels across the company (21%). Debt refinancing was cited by the least respondents at 3%.
- While layoffs could rise if the economy enters a recession, the study’s findings suggest CFOs may be thinking more strategically this cycle after seeing that companies which made “knee-jerk” cuts early in the pandemic had trouble restaffing as the economy bounced back, Marko Horvat, vice president of research in the Gartner finance practice, said in an interview. “During economic downturns most of the really successful CFOs try to position themselves for what they are going to look like afterwards,” Horvat said.
The study is being released as signs of broadening economic weakness have been building in recent weeks. Conference Board Chief Economist Dana Peterson said on Friday that the U.S. economy will probably tip into a “brief and shallow” recession from the fourth quarter through the first quarter of 2023 as the Federal Reserve raises rates to curb the highest inflation in nearly four decades, CFO Dive reported.
Yet for CFOs right now labor retention remains an entrenched challenge that is top of mind as compared to the potential for a recession which is still an uncertainty even though it is a concern they are tracking, Horvat said. “Hiring and retention is more real. When you think about the recession and all of that stuff, those are on the horizon,” he said.
While it may sound odd to hear that companies are focused on retaining staff, Horvat said the findings suggest that companies won’t proceed with broad layoffs and will instead make more strategic cuts of workers that have “replaceable skills.” Those workers involved in digital improvements at companies, for example, would likely be retained, he said.
Given the rising cost pressures financial executives face on all fronts, Horvat also said some best practices for companies seeking to hire or retain workers is to think about less costly ways to appeal to workers such as through providing flexibility in their work or career advancement opportunities.
Still, a recent survey by Industry Dive sister publication CFO.com found that some executives are contemplating a downshift in hiring. While a majority (72%) of financial leaders agreed or somewhat agreed that they faced critical hiring needs in the second half of the year, 17% pointed to a slowdown in hiring or a hiring freeze as a potential response to inflationary pressures.