The post-pandemic inflation landscape has brought labor shortages to industries, leaving finance departments in a bind, according to Grant Thornton’s quarterly CFO Survey, which polled 239 finance leaders at companies with annual revenues ranging from $100 million to more than $1 billion.
Fifty-six percent of CFOs said attracting and retaining talent is their biggest human capital priority over the next 12 months. Nearly 70% said a shortage of new talent would weaken their ability to deliver on short-term strategies.
While CFOs are concerned about a “looming war for talent,” Tim Glowa, leader of Grant Thornton’s employee listening and human capital services offerings, said in a statement, they’re receiving mixed messages on how to avoid the issue. For instance, “many organizations say people are expected to be back in the office, but that’s inconsistent with the data on what employees want.”
In the constricted post-pandemic labor market, employees have leveraging power; as they consider their options, they might be reluctant to surrender the increased flexibility they gained during the pandemic, Grant Thornton said.
“When you have a widening gulf between what employers expect and what employees want, evaluating the benefits you offer becomes even more important to your business,” Glowa said.
Additionally, companies considering permanent hybrid business models will likely face workforce-related tax issues, said Bill Marx, national managing partner of Grant Thornton’s tax reporting and advisory practice. “Companies that receive headcount-based state or local tax incentives could end up losing some of those benefits.”
More than two-thirds (67%) of CFOs said their departments need to control the “major expenses” related to employee benefits, specifically health care plans, the costs of which often outweigh a company’s per-employee profit.
This could be an opportunity, Glowa said. “By finding ways to enhance benefits and more effectively spend money allocated to benefits programs, [companies] can attract and retain top talent.”
As spending picks back up for most U.S. businesses, CFOs, the survey found, are focused on three investment areas: real estate, technology and cybersecurity.
Expecting a rise in fraud activity, more than half (54%) anticipate a jump in cyber risk and security spending. And, following a year and a half of remote work, many have a renewed appreciation for and desire to enhance their digital capabilities. Just under half said they anticipate investing in tech that solves “urgent business issues,” while 53% hope to invest in tech infrastructure aimed at equipping, enhancing and protecting their company down the line.
As for real estate, after several months of empty offices, CFOs are split on their projections; 24% expect a drop in corporate real estate costs, while 32% expect a rise, due to the necessity of larger floor plans or medical-grade air filtration systems.