Dive Brief:
- Thirty-six percent of CFOs at middle-market companies plan this year to boost pay, a 13 percentage point surge compared with last year, BDO found in a survey. They seek to stay competitive in a tight labor market by buffering the harm to employees from inflation, BDO said.
- Among CFOs, 29% plan to increase non-monetary employee benefits, BDO said in a report on a survey of 600 CFOs. Thirty-six percent of the top financial executives intend to strengthen up-skillling or reskilling programs, while 32% will invest more in remote and hybrid technology.
- The workforce investments “reveal CFOs’ push to not only attract and retain top talent but also boost employee morale and productivity,” BDO said.
Dive Insight:
The U.S. labor market, while loosening in recent quarters, remains unusually tight. U.S. job openings fell to 8.8 million in November, the lowest level since early 2021 but still well above pre-pandemic levels, the Bureau of Labor Statistics reported this month.
Hiring declined to the lowest level since early 2020, while the ratio of openings to unemployed people remained at 1.4, the same level as in October.
“Although employers found some reprieve from the tight labor market and high attrition rates of recent years, competition remains high,” Eskander Yavar, BDO’s national managing partner of advisory, said in an email response to questions.
More than a third “of CFOs plan to increase their involvement in strategic conversations regarding workforce strategy this year,” Yavar said. “Investment in employees and company culture is still key to attracting and retaining talent.”
High turnover, changing attitudes toward work, increasing overhead expenses and a challenging economic landscape have compelled more CFOs to seek talent outside the U.S., Yavar said.
“We anticipate as we head toward 2025, we will continue to see increases in outsourcing and co-sourcing, as well as a keen focus on right-sizing headcount in response to demands for new skills,” he said.
Generative artificial intelligence is also claiming the attention of CFOs, with 49% of survey respondents saying their company is drawing up a formal policy toward the new technology, Yavar said.
Generative AI “has transformed how leaders think about the future of their businesses,” he said, noting that “there appears to be an undeniable hunger to leverage tools like generative AI.”
“Although implementing generative AI involves effort from all areas of an organization, and specific use cases are still being explored, this year’s data suggests that CFOs view embracing this new technology as critical to their company’s long-term success,” he said.
Seventy-one percent of the CFOs who responded to the survey reported annual revenues ranging from $501 million to $3 billion in 2022, BDO said.
