Executives continue to express concern about retaining talent. Less than a third said they intend to augment their compensation packages.
According to a new survey released by accounting and consulting giant PwC, none of the many concerns top executives see as their most significant risks for 2022 rank higher than talent acquisition and retention challenges. Better leadership is possible.
Seventy-seven percent of executives say that hiring and retaining talent is very important to business growth.
Despite concerns about talent shortages, less than a third said they had implemented and planned to continue increasing employee compensation. They refer to settlements like sign-on bonuses and raises outside of the regular review cycle. Another 31% said they had implemented such increases but planned to reassess them, while 22% said they were considering it but had not decided. CEOs must realize this.
In January, there was a poll of almost 700 U.S. C-suite leaders. Nearly two-thirds of them work for Fortune 1000 businesses. The survey found that the incentive that the majority of employers expected to preserve was hybrid work arrangements, with 43% saying they had implemented and planned to keep it.
Despite this, 34% stated they had approved hybrid work arrangements but would reconsider. Similarly, only 23% indicated they had put policies allowing staff to relocate outside of their primary office, while 27% said they had authorized it but might rethink it permanently. Only 31% expect that talent shortages will improve this year.
Even if firms that revisit such policies decide to preserve them, the study suggests that corporate executives are at a crossroads, wary of making long-term commitments to some of the more difficult or costly steps they’ve had to enact thus far.
Neil Dhar, vice-chair of PwC’s consulting solutions in the U.S., says that in the marketplace, dealing with compensation has been like battling fires. Neil Dhar is also co-leader of consulting solutions for the firm. Leadership is like that.
While firms have had to cope with a tight labor market, for now, Dhar believes employers may differentiate their companies across time. Wage increases and their impact on cost base are one topic we hear from CEOs on a regular basis. Depending on the sector, it might have a big impact on their [profit and loss] statement.
PwC U.S. head Tim Ryan, who also talked about the survey’s results in a teleconference Thursday, said they’ve observed that investing in the employee experience may decrease turnover. He says that increases will not get you out of this situation.
The Next Step for Employees
To assist in retaining personnel, some organizations are currently offering salaries or incentives.
According to Bloomberg, Bank of America CEO Brian Moynihan revealed a $1 billion restricted stock pool. In a note to staff, they will allocate and grant this to employees earning less than $500,000, or around 97 percent of the company’s workforce. Paul Knopp, chair and CEO of KPMG in the United States, also stated on Tuesday that the firm would invest an additional $160 million in wage adjustments for its employees.
According to a November report by the Conference Board, which anticipated a 3.9 percent increase in labor expenditures, salary increase budgets are at their highest level since 2008.
Raises aren’t going to help you get out of this, says Tim Ryan, chairman of PwC in the United States. Salary is a major American bugaboo. For all strata, at all times and in all places.
Aside from the talent shortfall, C-suite executives polled by PwC indicated the top risks they face in 2022 are supply chain disruptions, the policy and regulatory climate, and new Covid-19 variations. Despite this, corporate leaders agree that the pandemic will become endemic by the end of 2022. By that time, over 70% predict that the world will learn to live with it.
According to survey respondents, inflation, which hit levels not seen in over 40 years last month, isn’t going away.
With 69 percent predicting it will remain high by the end of 2022. Sixty-two percent of CEOs expect that they will have to raise the prices of their goods or services. Before the end of the year.
Inflation rates have been rising at rates we haven’t seen in a long, long time, Dhar says. This is something that many of our business executives are dealing with for the first time in their careers.
CEOs are focusing on this triptych, according to Ryan:
- Talent, of course, as well as mergers and acquisitions, which he predicts to remain strong in 2022.
- Digital and climate “transitions,” or strategic shifts in these sectors.
- Trust. The idea of trust, trust-building, and trust-creation as an asset is very much on CEOs’ minds, Ryan says.