CFOs Expect a Significant Rise in Talent Costs

Nearly three-quarters of chief finance officers (CFOs) expect talent costs to jump significantly this year, according to a new report from Deloitte. In addition, 41% of CFOs reported feeling pessimistic about their companies’ financial prospects during 2022’s fourth quarter, up from 37% in the third, the survey found.

The survey, Deloitte’s Q4 2022 CFO Signals Survey was conducted between Nov. 7 and 21, 2022. It included responses from 126 CFOs in the U.S., Canada and Mexico.

Respondents said that they expect a drop in their company’s revenue and earnings, as geopolitics and political instability stand out as their most pressing external risks. Talent retention emerged as the top internal worry among the executives, in addition to prioritization and execution.

“CFOs again lowered their year-over-year growth expectations for revenue, earnings, capital spending, domestic hiring and domestic wages. The biggest declines in growth expectations were in revenue, which decreased to 4.2% from 6.2%, and earnings, which dropped to 2.9% from 6.4%,” the survey said.

Reducing Costs With Automation

Meanwhile, CFOs dropped their expectations for domestic hiring growth to 2.1% from 2.6% in the previous quarter. They reported that domestic wages and sales slumped to 4.6% from 4.8%, and a significant number of executives (41%) noted that their organization plans to hire more people than they will let go.

A majority (61%) said they plan to implement digital transformation and automation to replace some jobs previously performed by humans. This is even as two-thirds (66%) plan to allocate or reallocate capital to new business investments next year.

“Deloitte’s latest CFO Signals survey reveals that the challenging economic environment that persisted throughout 2022 has impacted CFOs, both in their assessments of global economies and in their planning with respect to strategy, capital, operations and talent for 2023,” said Steve Galluci, national managing partner at Deloitte’s U.S. CFO Program.

“Still, CFOs don’t appear to be pulling back on new business investments, the introduction of new services or products, or their use of automation and digital technologies,” Gallucci added.

Authors

Mark Feffer

Mark Feffer is executive editor of RecruitingDaily and the HCM Technology Report. He’s written for TechTarget, HR Magazine, SHRM, Dice Insights, TLNT.com and TalentCulture, as well as Dow Jones, Bloomberg and Staffing Industry Analysts. He likes schnauzers, sailing and Kentucky-distilled beverages.