Executives focus on combating inflation, hiring and retaining talent, supply chain management, and data and privacy regulations this year
Digital transformation remains a top strategy to manage uncertainty
C-suite collaboration paramount in an effort to build and maintain trust
Thursday, January 27, 2022 -- Nearly 70% of business leaders believe that COVID-19 will turn from pandemic to endemic in 2022, but many expect that inflation will remain elevated throughout the year according to the results of the latest PwC Pulse Survey: Executive views on business in 2022. Additionally, the more than 650 C-suite executives surveyed cited the ability to hire and retain talent as both the most important factor (77%) and biggest risk (48%) in reaching their organizations’ growth goals in 2022.
Even as business leaders recognize the importance talent has in achieving growth this year, they are less optimistic on the current labor market, with only 36% believing that voluntary turnover will return to the pre-pandemic rate by the end of the year, and only 31% believing that talent shortages will ease by the end of 2022. Notably, board members view talent management as a top issue, with 73% planning to devote more time to workforce and diversity, equity and inclusion (DE&I) efforts.
To combat this, business leaders plan to keep a number of initiatives to retain and attract talent, including offering hybrid work options for employees (43%), increasing career advancement and upskilling opportunities (36%), increasing compensation for employees (31%), making remote work a permanent option (30%) and improving benefits for employees (30%). See ‘key survey results’ below for further details.
“As employers look to attract and retain critical talent, they’re shifting their investment into their employees – creating meaningful work opportunities, investing in learning and upskilling, and creating career advancement opportunities – all while providing new flexible working options to meet employee personal needs,” said Julia Lamm, PwC Workforce Transformation Principal. “2022 will be an important year for employers to build trust between employers and employees, as they seek to stabilize their teams and position for growth.”
In addition to talent issues, executives identified supply chain disruptions and vulnerabilities (32%), the US policy and regulatory environment (29%) and business model changes (28%) as the biggest risks impacting their organizations’ growth. Additionally, only 45% of respondents predict supply chain disruptions are likely to ease by the end of the year, and 62% of business leaders indicate they will increase the price of goods and services in 2022 to manage against these risks.
“The rates of inflation are the highest they’ve been in nearly 40 years, and for many business leaders this is the first time they are dealing with the issues associated with it,” said Neil Dhar, PwC Vice Chair and Consulting Solutions Co-Leader. “The pressure that exists due to the rising cost of goods, coupled with the continued impact of the pandemic and the ‘Great Resignation,’ is demanding increased attention and new skill sets from leaders across many fronts.”
Further, as momentum for US corporate tax reform slowed entering 2022, focus has shifted to the evolving global tax environment, and business leaders are now considering a number of digital and technology investments to address those challenges: 42% are considering accelerating digital transformation initiatives, 38% are considering automating processes and 36% are considering making sizeable technology investments.
“As business leaders navigate the forces driving policy decisions in Washington and globally, they are often doing so against the backdrop of broader transformations within their own organizations,” said Ken Kuykendall, PwC US Tax Leader. “Throughout the strategic discussions related to any broader transformation efforts, it’s important for tax to have a seat at the table. Tax can be a catalyst that delivers trust and strategic outcomes for stakeholders.”
Outside of workforce issues, business leaders have diverse views on the additional risks that could impact their organizations’ growth in 2022. About 30% cite continued supply chain disruptions and vulnerabilities, new COVID-19 variants, the policy and regulatory environment in the US, or business model challenges as major growth risks. Moreover, stakeholders have stated that they feel the most senior leaders at a company are responsible for trust and expect a collective approach within the C-suite to solving important problems.
“Today’s challenges for executives are more complex than ever, and they are coming at an unprecedented pace,” said Tim Ryan, PwC US Chair and Senior Partner. “While we know that the majority of employees and consumers trust their company the same or more now than before the pandemic, we also know that trust is incredibly fragile. The C-suite must work together to tackle today’s issues holistically as these challenges are no longer isolated to a certain department or corporate function. But this presents an opportunity for leadership teams to not only drive value, but to also build trust among stakeholders, which is crucial to an organization's success.”
For more information and to view the full study, visit: www.pwc.com/us/execviews2022
PwC Pulse Survey: Executive views on business in 2022
Between January 10 and January 14, 2022, PwC surveyed 678 US executives comprised mainly of CFOs and finance leaders (19%), CHROs and human capital leaders (14%), tax leaders (14%), risk management leaders, including CROs, CAEs and CISOs (14%), COOs and operations leaders (12%), CIOs, CTOs and technology leaders (15%) and corporate board directors (12%). Respondents were from public and private companies in six sectors: industrial products (26%), consumer markets (24%), financial services (23%), technology, media and telecom (14%), health industries (6%), energy and utilities (5%). Sixty-three percent of respondents were from Fortune 1000 companies. The Pulse Survey is conducted on a periodic basis to track the changing sentiment and priorities of business executives.
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