- Attracting and retaining employee talent — a challenge intensified by the pandemic — has jumped to among the top concerns of business leaders looking ahead to 2022 and the next decade, according to a global survey of 1,453 C-suite executives and board members by Protiviti and NC State University.
- “Succession challenges, ability to attract and retain top talent” vaulted to the No. 2 ranking of business risks from No. 8 a year ago, according to the survey. Leading the list of risks for 2022 is the impact on business from pandemic-related government policy.
- “Most if not all of the organizations that we’re speaking with are struggling with things like attracting, retention, engagement, upskilling,” Protiviti Managing Director Fran Maxwell said during a webcast. “It’s pervasive throughout all industries, throughout all organizations now.”
CFOs looking ahead to 2022 confront an unusually broad array of challenges, including widespread labor shortages and the highest inflation rate in three decades. Such headwinds shape the decisions by CFOs on wages and other workforce budget items as they compete for talent.
In a sign of the tight supply of labor, the number of available jobs far exceeds the number of idle workers. During October, 7.4 million workers were unemployed while job openings rose to 11 million from 10.6 million in September, according to the Labor Department.
The quits rate, or the number of workers who left their jobs as a percent of total employment, rose from 2.3% in January to 2.8% in October, the second-highest level in data going back to 2000, the Labor Department said Wednesday. The quits rate hit a high of 3% in September.
Whether switching jobs or staying put, workers see inflation eroding their pay. The consumer price index (CPI) in October rose at a 6.2% annual rate — the biggest surge in three decades, according to the Labor Department. The CPI for November is scheduled to be released on Friday.
Employers have tried to attract and hold on to talented workers by raising pay. Hourly private sector wages rose 4.8% in November from 12 months before, according to the Labor Department.
Companies have budgeted 3.9% wage increases for 2022 — the biggest jump since 2008, according to a survey by the Conference Board. Grant Thornton surveyed 551 human resources leaders and found that companies plan merit increases in salary averaging 5%.
“A majority of survey respondents believe that the war for talent will last more than a year, and it appears that cash will be a major incentive of choice,” according to Tim Glowa, a principal at Grant Thornton focused on human capital services.
Increasing pay is just one way to attract and retain talent, Maxwell said. Companies should also take several steps to improve the “employee experience,” including offering flexible or hybrid work arrangements, providing learning and development programs and ensuring a “well-being atmosphere.”
“Organizations that will win the talent war will focus on differentiating an employee experience, making it different for each employee,” Maxwell said.