PwC Pulse Survey: Next in work
say hybrid work is not a challenge to revenue growth compared to 20% of all executives
see the loss of in-person corporate culture as the biggest challenge to hybrid work
are increasing investment in digital transformation over the next 12 months
CFOs are bullish about the future. They don’t see hybrid work as a big barrier to growth, and they are confident they have the technology in place to make a hybrid model successful. After 18 months of the pandemic, CFOs are ready to push their businesses to be more competitive — they know they need to be a different organization tomorrow than they are today. That means a broad-based approach and pulling on all levers with a keen focus on people and digital transformation. And as concerns about high turnover and competitive wages grow, CFOs recognize that transforming the business is the clear path to growth for the future.
Our Next in work PwC Pulse Survey highlights how important people and technology are to a CFO’s growth and investment plans. This focus comes against a backdrop of an increasingly tight labor market, escalated inflation and more fluid in-office plans for the fall. People have been a consistent theme for the CFO agenda, but the focus now is shifting to recruitment, retention and growth.
As they envision both the future of work and their future growth agendas, CFOs recognize the dependencies on people and technology. But as their companies move forward with new ways of working, CFOs are concerned about people. Their biggest concern around making a hybrid work model successful centers on what gets lost when people aren’t physically working together. Nearly half (48%) of CFOs say the loss of corporate culture is a major challenge, the top challenge CFOs cited and far more than the 36% of all executives who said the same. The loss of mentoring opportunities is another major challenge with hybrid work, according to 40% of CFOs (versus 30% of all respondents), and 29% cite a loss of innovation opportunities (versus 26%) as a major barrier to successful hybrid work.
This sentiment around people also shows up in what CFOs are thinking as they reimagine work, the workplace and their company’s role in society down the road. More than half (51%) are rethinking and communicating their company’s purpose statement to help attract talent. And 60% plan to advance diversity and inclusion (D&I) efforts internally with things like leadership mentoring programs for women and minorities.
CFOs are putting their money where their mouth is around people, with more than half making investments in D&I initiatives (57%) and in general training for current and new employees (52%) over the next year.
Investment in digital transformation has been a top priority for CFOs throughout the pandemic, as many kept digital investments safe from cost cuts, reallocating resources and even accelerating some investments. In fact, 56% of CFOs said in June 2020 that their tech investments would make their company better in the long run.
CFOs’ bets are paying off, as their investments helped make their companies more agile and able to handle the huge shift to remote and hybrid work. The success CFOs have seen is giving them a higher degree of confidence in continuing to get the technology angle right as their companies more fully embrace a hybrid work model, which the majority of CFOs say is part of their company’s plan in the near future.
Still, CFOs want to transform even faster: 68% are investing in digital transformation over the next 12 months, including in technologies like cloud and analytics. This is a continuation of what CFOs have been doing over the past 18 months to accelerate revenue growth.
CFOs also see technology as far less of a barrier to making hybrid work successful than many of their peers (44% say technology isn’t a challenge versus 26% of all respondents). This is key to facilitating new ways of working.
More than two-thirds (67%) are also investing in cybersecurity tools and training. As companies make the move to a hybrid work environment, cybersecurity remains a top concern, and more than one-third of CFOs (34%) say not having effective cybersecurity measures in place is a challenge to a successful hybrid model. On the other hand, 25% of CFOs indicate that they have the cyber aspect of hybrid work handled and don’t think it will get in the way.
CFOs have another worry around people: turnover. Eight out of nine executives say they’re experiencing higher-than-normal turnover right now, so it’s little surprise that 81% of CFOs are concerned that high turnover and labor shortages will impact their company’s revenue growth.
Why are people leaving? More than their peers, CFOs think it’s for better wages/salaries (61% versus 41% all respondents), though CFOs may not want to make extensive changes to compensation structures because they don’t think turnover will last — 45% are only somewhat concerned about turnover and say it will return to a normal rate soon. Another likely explanation is the fact that compensation is the most expensive option.
While CFOs are generally more optimistic than many of their peers, they’re still worried that growth will be limited if they can’t find a solution to the labor shortage issue. Far and away the most of all respondent groups, CFOs say their company is going to emphasize leadership and culture (63%) and company purpose and values (61%) to differentiate from competitors. While this focus might typically be something coming from the CHRO, CFOs often serve as stewards of the company, communicating the company’s brand and mission to investors and other stakeholders. In this role, they tell their company’s story around purpose and values and why both are so critical to the employee experience.
The impact of turnover goes beyond companies revising and rethinking how to differentiate themselves. More than three-quarters of CFOs say compensation changes are impacting their forecasts, as many recognize that they might have to start paying more for talent in the future if the tight labor market lasts. About three-quarters say the same about staffing shortages impacting their company’s ability to take on new business (74%), and their ability to complete existing work is also factoring into their forecasts (77%).
Still, the biggest strategic business change CFOs are making based on what they learned from the pandemic will help them address the turnover challenge, at least in part. Well over half of CFOs (58%) have been focusing on automation to help offset the loss of institutional knowledge when people separate from their companies. This is not new territory for CFOs, as they’ve been pushing to automate many aspects of their finance departments to free up time for more business partnering activities.
This is a continuation of what CFOs have been doing over the past 18 months. CFOs have been looking to standardize and automate not only to be more efficient but also to help address people agenda issues — giving employees the chance to rotate between departments and get training on new things more easily.
Our Next in work PwC Pulse Survey, fielded August 2 to August 6, 2021, surveyed 128 finance leaders from Fortune 1000 and private companies, along with other C-suite executives, about business priorities and decisions they’re making around the future of work. Find all of these insights in our PwC Pulse Survey.