People want purpose in their work, and by placing employee well-being front and center, many organizations seem to be delivering. But when we drill down on findings from PwC’s August US Pulse Survey on the future of work, we find there’s more to be done. From the C-suite to middle management, leaders have come to realize that aligning corporate culture, purpose and workforce planning needs to be more than just a high-level discussion — it’s an imperative that affects the bottom line.
It’s time for enhanced collaboration (read hard dollar commitment) between CFOs and CHROs — one that advances strategies aligned with workforce planning and ESG initiatives. Failing to give HR latitude to fully address employee needs can lead to an employee exodus — potentially resulting in millions of dollars of onboarding costs and productivity losses.
As some companies move forward with fall 2021 return-to-the-workplace plans, others are pressing pause. Workplace dissatisfaction with fully in-person requirements and continuing uncertainty brought by virus variants has the potential to spur employee flight. Two-thirds of employees are looking for a new job, up from over a third last quarter.
Digital transformation has commanded the lion’s share of CFO concern and budget, with ample reason. In response to the pandemic, leaders, organizations and employees needed to become fully digitized virtually overnight. But the stresses of living and working through a pandemic exposed both strengths and weaknesses in corporate culture. So while CFOs are in step with HR leaders on creating a positive and inclusive culture, there’s a space to tap into CHRO peers’ thinking around a hybrid environment that works for all.
When it comes to HR budgeting for the big picture, only one-quarter of CFOs plan to increase investment to expand benefits — a far cry from the budgetary boost needed by CHROs to retain and hire new talent.
But collaboration through budgeting means more than throwing money at the problem. Extra comp for new hires has the potential to backfire if existing employees become aware of disparities in pay. And while most CFOs believe employees are leaving based solely on compensation, CHROs tend to disagree.
What’s most important to employees varies widely. Overall, workers expressed a desire to individualize their work-life balance, and honoring those wishes presents an opportunity for cost savings. HR leaders have recognized that although culture is critical to retaining and recruiting talent, employees want more. After struggling through a pandemic and confronting uncertainties surrounding return to work, many are conflicted, and the reality is that worker concerns are much more nuanced than many executives perceive. PwC’s March 2021 US Pulse Survey found that employees would consider leaving for:
But the value placed on remote work by employees presents a challenge for CFOs — since many feel corporate culture and innovation suffer when employees are not physically present at work.
It’s this disconnect that could set a collision course for tremendous revenue loss due to employee attrition, compounded by productivity losses. The C-suite knows this. More than a third (36%) of CFOs are very concerned about the impact of turnover and labor shortages on revenue growth, while 37% of CHROs cite retaining employees (37%) as a top priority over the next three to six months.
And with good reason. According to Harvard Business Review, voluntary turnover can cost organizations up to two times an employee’s annual salary.
Focusing on employee experience is key to retention. An exodus of employees — with knowledge of your organization’s culture and processes — can collapse productivity. That translates to real business impact over the short term. Trying to staunch that flow with new talent will take additional onboarding dollars, made more difficult if your HR people and processes aren’t streamlined. And losing recent hires to a competitor with better perks or an employee-centric culture will exacerbate the situation.
Financial leaders continue to recognize that a positive, inclusive culture needs to remain a priority for both the short and longer term. A culture in which employees are happy in their work is critical to attracting new talent and keeping experienced employees from jumping ship. The good news is that most CFOs we surveyed are planning to increase investments that advance diversity and inclusion initiatives and/or training.
The potentially enormous hit to your bottom line caused by an employee exodus is a problem that the CFO can help fix. By collaborating and partnering with HR leaders to help better address individual employee needs, CFOs can take the lead and implement strategies that back your culture and purpose. Sticking to an outdated model of work won’t cut it anymore.