We’re well into 2022, and it doesn’t look like the Great Resignation is tapering off. After 48 million people left their jobs in 2021, the pace of quits has only increased, to 13.2 million in Q1 of 2022 and an all-time high of 4.5 million in March. Clearly employees are still unsatisfied. And a recent Willis Towers Watson survey of nearly 10,000 US employees in large and midsize private employers showed 44% of employees are “job seekers” and 56% cite pay as a top reason they’d look.
CFOs have taken notice. A recent Deloitte survey of CFOs recently reported that retention is the number one concern of CFOs right now.
The good news: they’re in a great spot to do something about it. Here are four key reasons why.
1. Hiring budget: plan versus reality
Great CFOs are strategic operational leaders. As a result, in many companies they pull double duty as COOs and run HR and recruiting teams. Candidate experience matters, especially at the negotiation phase.
As the war for talent continues, the hiring budget you may have laid out for a particular role or department may not be realistic. Make sure your budget reflects market reality, and your hiring managers know the negotiation boundaries they need to stick to. Don’t let confusion slow negotiations and lead strong candidates to slip through your fingers.
2. Location strategy
Covid threw out the default assumption of working at HQ. Many employees and candidates want flexibility. CFOs are at the heart of understanding how to answer questions like:
- Should the company move away from a central office (or offices) to embrace permanent work-from-anywhere?
- What are the tradeoffs between having a positive office culture and remote work benefits?
- Do we adjust salaries by location?
- How do we handle folks who move from high- to low-cost geographies, compared to those we hire in a low-cost geography?
- Do we offer new benefits to remote workers – like catered lunch delivery, office setup, or phone/internet stipends?
Thousands of companies are asking these questions of themselves in this job market. Are you?
3. Retrenchment strategies
With interest rates spiking and a brief inversion of the yield curve in March, many analysts are now flashing warning signs of potential recession. What happens if you miss your goal and have to retrench? CFOs had better be ready to figure out the tradeoffs between different headcount cost reduction approaches and understand the option that hurts retention least in this strong labor market:
- Elimination of raises and bonuses
- Salary reductions
A strong modeling approach can help you uncover the size tradeoffs between these options.
As a record-high number of employees are ready to jump ship and go elsewhere, cultivating good communication practices is vital. The more transparent a company is, the easier it is for employees to plan their future accordingly.
The CFO’s leadership can be considered critical in company guidance. With a strategic approach to financial analysis and projections, they can assume an impactful role - driving the business forward with thoughtful planning and clear direction. Many of the CFO’s decisions can shape a company’s entire workflow: from policies on employee work locations and office space, the systems they use to do their jobs, compensation, to different aspects of company culture. This, in turn, directly influences employee satisfaction and retention rates.
CFO's abilities and duties extend far beyond just managing the company's finances. In a time of uncertainty, CFOs can make a difference in retaining employees directly and indirectly.
The good news is that with the right frame of mind and leveraging their financial modeling skillset and the right tools, CFOs and their teams are really well positioned to contribute, budget, evaluate and recommend the right course of action. Good FP&A processes and systems put CFOs in the catbird seat to ensure smooth, speedy and satisfying hiring processes, location strategies, retention strategies and clear communications about the company’s situation, plan and opportunities.