Business execs see hiring as top issue in ’22, even as pandemic wanes

More than two-thirds of business leaders believe the COVID-19 pandemic will become endemic this year, making it  something businesses and society will have to live with, according to a survey released Thursday by PricewaterhouseCoopers (PwC).

The professional services firm conducted the online survey of 678 C-suite executives, which included CEOs, CFOs, COOs, tax and audit executives, and corporate board members. Two-thirds of those surveyed were from Fortune 2000 corporations and 69% said they believe this is the year the pandemic will wane.

Just days before the Supreme Court struck down the Biden Administration’s COVID-19 vaccination and testing rules, PwC’s survey found companies taking different tacks on vaccine mandates and contact tracing.

About a third (33%) require vaccinations for on-site work and will continue to do so. Almost a quarter (23%) require it now, but will reconsider in the future. And 16% have dropped the vaccine requirement in response to labor shortages. Companies are also divided on automatic contact tracing: 38% percent have implemented it (with half of them likely to revisit it) while 29% have no plans to require it.

Aside from pandemic-related concerns, more than three-quarters of respondents said their ability to hire and retain talent is both the most important factor (77%) and the biggest risk (48%) they face in reach corporate growth goals in 2022. And notably, 88% of board members see hiring and retaining talent as “very important” to a company’s prospects; that subject is atypical in the corporate boardroom.

PwC

Results of the survey, which took place from Jan. 1-14, also revealed most executives feel good about their organization’s prospects for 2022, though many expect inflation will remain elevated.

“Overall, I would tell you there’s a very high sense of optimism in 2022 in terms of growth and also in terms of good, high-quality earnings,” Tim Ryan, PwC’s U.S. chair and senior partner, said during a news conference. “CEOs feel very good about the things they can control.”

With an unemployment rate of 3.9% in December, the US is close to full employment. That means there are not enough people to fill job openings. Only 36% of executives surveyed by PwC believe voluntary turnover will return to pre-pandemic rates by the end of the year.

A record 4.5 million American workers quit their jobs in November as the “Great Resignation” continued to affect the labor market, according  the US Bureau of Labor Statistics.

“Companies are looking internally to solve their talent. They can no longer hire their way out of this talent shortage,” said Julia Lamm, a principal in PwC’s Workforce Transformation practice. “Our survey found 47% of senior [executives] said their companies are improving career advancement opportunities and thinking about career paths differently — looking at more internal mobility across an organization, versus just that traditional upward career path.”

PwC’s results echo other recent surveys.

Workers often quit because they feel they’ve hit a corporate ceiling. According to a 2021 survey by employee management platform provider Lattice, 43% of respondents felt their career paths had either stalled or slowed to a crawl. Many IT managers and executives, for example, are seeking career advancement in positions that are more business centric and therefore have greater advancement opportunities, Lattice’s survey found.

The top four topics on the minds of CEOs, according to the PwC survey were:

• Talent – It has become a boardroom topic in terms of stemming employee churn and rebuilding corporate culture by emphasizing skills training, manager-employee communication, career path opportunities and work flexibility and equity.
• Transactions or M&A activity — PwC expects companies to buy and sell assets to improve their overall portfolio to stay ahead of competition.
• Digital transformation (DX) – PwC sees significant investments in cloud architectures and services to help manage costs and offset inflation. That transformation is also to enable artificial intelligence to understand data in terms of business value. The latter will be “critical” for long-term growth and to fend off competition.
• Trust – CEOs are asking how to create and maintain the trust of stakeholders, employees, and customers. That includes what a company pays in taxes, how it protects customer data, and whether algorithms and protection policies meet ethical standards set by consumer expectations and regulatory oversight. Trust also involves how executives treat employees.

“So…, trust building and creating trust as an asset is very much on the minds of CEOs…as a competitive advantage for many companies out there,” Ryan said.

PwC

The PwC survey also revealed that executives are using dollars to attract and keep talent, with 62% increasing compensation for employees through bonuses and cost of-living adjustments and 56% changing processes to address labor shortages. (Less than a third (31%) expect talent shortages to ease this year.)

At the same time, inflation is at a 40-year high, putting today’s executives in uncharted territory, PwC’s report said. Corporate leaders are pulling multiple “levers” to manage margins eroded by rising oil and commodity prices, supply shortages, and higher wages. And 62% of business leaders said they are likely to pass along price increases to customers.

PwC found the top ways of improving employee turnover are employee communication between leaders and their employees (35%) and better articulating their company purpose (35%).

“Building trust between employer and employee means listening and responding to employee needs,” Lamm said. “This is an incredibly unique time to take bold steps forward and implement new ways of working that align with the expectations and the needs of your people.”

Second only to attracting and retaining workforce talent, was a focus on digital transformation (DX); 60% of executives surveyed cited it as the most important growth driver in the years ahead. That was in line with past surveys the firm conducted.

With talent in short supply, DX initiatives will be all the more critical to get the most out of investments.

“Digital capability is at the heart of execution, whether it’s increasing supply chain resilience, rolling out new products and services for consumers or shifting to investor-grade [environmental, social and corporate governance] reporting in preparation of new disclosure requirement,” PwC said.