Retaining employees a top concern for CFOs

Hiring and retaining employees is at the top of concerns for chief financial officers in the US, according to a survey by Duke University.

Of the CFOs from 241 public and private companies surveyed in the latest Duke CFO Global Outlook report, 53.1 percent expressed “difficulty attracting/retaining qualified employees” as their main concern during the three months through mid-September. That response was the highest since the second quarter of 2008, when the survey first released results on that topic.

Declining unemployment and an increase in hiring could be contributing factors to heightened concerns. The unemployment rate in April stood at 3.9 percent, hovering at levels last seen in 2000. More jobs are being added to the growing economy. Non-farm payroll jobs, a benchmark on hiring, also increased by 201,000 in August.

Compared with other regions, CFOs in Europe also put hiring and retaining employees at the top of their concerns, with 36.2 percent responding. In Asia, that number was lower, at 33.5 percent, in Latin America at 16.1 percent, and in Africa at 12.8 percent. Respondents in the survey said that they have used higher salaries and bonuses as incentives to attract and retain employees.

The survey is comparable to views held by CFOs at private equity firms, who say that retaining talent remains a challenge. At an Invest Europe forum in Lisbon in June, CFOs said that some of the ways to retain members in their finance team included paying them well and keeping them engaged. A recent EY survey showed that while 18 percent said it was difficult to retain talent, but a higher proportion, at 35 percent, said it was more difficult to attract talent.

Economic uncertainty was higher in Latin America, Asia, Africa and Europe than in the US. In Europe, economic uncertainty (35.4 percent) and regulatory requirements (33.9 percent) rounded out CFOs’ top three concerns. That was in contrast to last year, when difficulty attracting/retaining employees was a much bigger concern (40.7 percent), and economic uncertainty (30.2 percent) and regulatory requirements (25.9 percent) were lower on CFOs’ minds.

Certain requirements may have been contributing factors, such as the General Data Protection Regulation, which came into effect in May. Also, the UK’s planned secession from the EU in March has heightened concerns about its impact on the UK economy, which is the second largest in Europe.

As a reflection of expectations of sustained economic growth in the US, CFOs were optimistic on the outlook of their firms. Expected revenue growth for the next 12 months among CFOs surveyed increased to 7.5 percent in the recent quarter from 6.9 percent in the previous quarter. Optimism about their own firm was at the highest recorded by the survey (71.4 on a scale of 0 to 100) since 2007.

In other survey results, concern on rising wages and salaries was the highest in the US and Asia. Cost of benefits, which includes coverage for health and life insurance, was highest in the US and Latin America.