Among all of the worries in the business world- inflation, energy prices, supply chain issues, and the threat of a recession- one thing still keeps the C-suite up at night more than anything: the talent shortage. There’s nothing more frustrating than building a profitable business, navigating through some of the most difficult economic periods in recent history, and dealing with new difficulties being thrown at the organization, only to not be able to maximize revenue simply because it’s too hard to find the right employees.
This is influencing businesses of all sizes. For Fortune 500 companies, CEOs cited the talent shortage as their number one concern- above all other economic difficulties. But the talent shortage is not only affecting multi billion dollar companies looking for high levels of talent and specific leadership positions. For small businesses as well, 77% are expecting a shortage of applicants while 74% say there are too few qualified candidates.
The numbers back up these concerns. There were an all-time record 11.3 million job openings in January 2022, while 2021 saw an unprecedented resignation and turnover rate. Employees are well aware that the ball is in their court as they continue to take advantage of the heavily weighted employee market.
Management’s first step in retaining talent is to offer higher wages, however competing in a wage race is not always possible for smaller companies, especially during a market downturn. However, even with competitive and inflated wages, employees have the upper hand and can look elsewhere.
HR is working full time to offer incentives and think of recruitment ideas, but oftentimes it’s still not enough. A good position to explore is collaboration with the finance department. Although not part of HR or directly involved with hirings, CFOs can play an important role in talent retention for a number of reasons:
How Can CFOs Influence Talent?
1) Influence Employee Benefits
A growing percentage of employees are taking things other than salary into consideration before choosing a company. For example, in Grant Thornton’s “State of Work in America” survey, more than one-third (34%) of 5,000 full-time U.S. workers said they selected their new job because it offered a better work-life balance, independent of salary or other factors. In addition to work-life balance, potential employees are paying close attention to benefits such as vacation days, medical, and a work from home or hybrid option.
CFOs are in the unique position to analyze and influence employee benefits. This is one of the largest business expenses for the company which usually accounts for about one-third of an employee’s entire compensation.
With that much money flowing each year, there is inevitably some that isn’t used efficiently. A typical company will waste between $3,000- $5,000 per year per employee on benefits that aren’t used or fully appreciated, and while HR has budgets and employee preferences, it’s the CFO who holds the bigger picture of it all. Other than having a better understanding of the company’s finances, the CFO has the data and the authority to make quick and decisive actions that can not only save the company money but also leave the employees more satisfied.
Collaboration between the two is key. HR are the ones with boots on the ground who talk to and understand what employees want, while the CFOs can figure out how to responsibly budget and move expenses around. Together, they can create a far more personal, beneficial, and even cheaper compensation package that will help influence the talent shortage.
2) Lead by Example
Just like work-life balance is one of the most important things for employees when choosing a job, so too having bad managers is one of the biggest catalysts for employees leaving.
In fact, bad management and work culture is a double whammy for the talent shortage. More than a quarter (28%) of employees said dealing with their managers is the most stressful part of their day, according to the “State of Work in America” survey. At the same time, a Grant Thompson report shows that company values and company reputation are two of the most important reasons that employees have declined job offers since the pandemic started.
For potential employees, even hearing rumors or thoughts of a bad workplace could be enough to make them sign somewhere else. In today’s workplace, there are so many options and talented employees can afford to be picky. Being a leader and a C-suite executive, CFOs should do everything in their power to make sure this is avoided.
In regards to current employees, ensuring that management does not increase their stress or play a role in forcing them to leave is also something that CFOs can do. Performing regular check-ins with other leaders, supervisors, and HR to ensure they are prioritizing their employees’ work-life balance and feel heard will flip the script from “management is stressful” to “management is supportive.”
The last part of this is leading by example. CFOs that model an appropriate work-life balance and a healthy lifestyle will encourage employees to do the same and give them a feeling of permission to do so. On the flip side, CFOs that work consistently long hours and act stressed out will inadvertently spread this mindset to employees.
3) Be a Marketer
Finance and marketing are two very different departments whose styles tend to clash. But in this scenario there is one marketing aspect that CFOs can strategize: target audience.
Before marketing creates a campaign they must sit down and decide who they want to target- otherwise it will be all over the place and inefficient. With retaining workers there needs to be a targeted campaign as well.
Looking at the competition, understanding what the company’s selling points are, and narrowing down who the target audience is, will all help improve retention and hiring rates and even make the process more efficient. Different positions, experience levels, and geographic locations will all require very different campaigns and focuses in order to be effective.
Doing this requires collaboration between marketing, executives, and HR, and maybe even some company retrospection on why employees left. For example, a targeted campaign to ensure that mature workers who want to retire early will stay (a common issue in the past few years) will require different resources than a campaign targeting highly skilled VPs. With so many companies fighting for so few workers, figuring out a well thought of company wide strategy and plan will greatly improve the talent success rate.
