- The war for talent topped the list of risks that C-suite executives expect to grapple with this year with 48% identifying talent acquisition and retention challenges as the biggest concern, followed by supply chain disruptions and vulnerabilities (32%) and new COVID-19 variants (29%), including omicron, according to a PwC Pulse Survey of 678 executives released on Thursday.
- Labor is also seen as a key to growth this year, with the largest chunk of executives (77%) identifying hiring and retaining talent as a very important driver, followed by (60%) identifying digital transformation initiatives and (56%) identifying increasing agility to better operate in a turbulent business environment.
- Despite the stated concern about retaining talent, fewer than 50% of executives said they had implemented and will keep plans to offer hybrid work options, increase career advancement and upskilling opportunities, and increase employee compensation or improve benefits.
Executives this year are optimistic about earnings relative to 2021 but are continuing to face headwinds from inflation, the transition in the workforce as the pandemic evolves and labor issues, said Tim Ryan, PwC U.S. chair and senior partner, during a media conference call on the survey.
CFOs and CEOs are also bracing to live with some of the same challenges through year-end, with 69% expecting inflation to remain elevated and the same percentage expecting the pandemic to turn into an endemic and “we will just live with it,” the survey found.
In addition to inflation pressuring the cost side, executives will enter a “more expensive 2022 because as we move from a pandemic to an endemic, that means that people will be traveling, getting together more, training, building and rebuilding culture and that will drive some expense increase in 2022,” he said. While labor is an obvious pricing pressure on finance, increasing spends are likely to deal with supply chain and cyber issues as well as insurance costs, he said.
The war for talent is also weighing on executives who are fighting higher costs on a number of other fronts, he said. "One of the things that is very clear is that passing prices on to the end consumer — if that’s the only strategy that companies have, it will become more challenging,” he said. “You simply can’t buy your way out of this.”
The survey shows that companies have implemented and will keep a range of methods to help workers, with 43% doing so with hybrid work options, 36% with increasing career advancement, 31% with increasing compensation and 30% with making remote work a permanent option.
The tightest labor market in decades prompted a 5.8% increase in private sector hourly wages in 2021, according to the Labor Department. This year U.S. companies plan to raise pay 3.4% as they compete to attract and retain workers, Willis Towers Watson found in a separate survey.