How CFOs can prepare for the Great Resignation

2022 is here and it doesn’t look like the Great Resignation is tapering off. According to the latest figures from the US Bureau of Labor Statistics (BLS), which has tracked quit rates and levels since 2000, more than 4.5 million workers left their jobs in November alone. The total now exceeds 21 million going back to July, with private sector reports suggesting December was much the same as November. 

CFOs have taken notice. Deloitte’s recent survey of CFOs recently reported that retention is the number one concern of CFOs right now.

With quit rates at an all-time high, wage growth unseen in decades, and continued uncertainty about the future of work, it’s no surprise business leaders are increasingly thinking about ways to retain employees.

How can CFOs contribute to the hiring and retention of top talent?

It goes without saying that finance teams will primarily be thinking about the dollars and cents. Still, it’s helpful to start with a strategic goal in mind – keeping employees happy, and ensuring a competitive positioning in the hiring market. 

Here are some things to consider:

1. Location strategy

Should the company move away from a central office (or offices) to embrace permanent work-from-anywhere? What are the tradeoffs between having a positive office culture and remote work benefits? Do we adjust salaries by location? How do we handle folks who move from high- to low-cost geographies, compared to those we hire in a low-cost geography? Do we offer new benefits – like catered lunch delivery, office setup, or covering phone/internet?

And these aren’t the only questions executives might face. There are also issues introduced by organization expansion – for example, deciding between growing your headquarters in one centralized location, or opening additional offices to house back-office functions in lower-cost geographies. If you do take the second option, make sure to plan for additional managerial and staff costs necessary to stay in sync.

2. Retrenchment strategies

What happens if you miss your goal and have to retrench? How do you weigh the tradeoffs between different headcount cost reduction approaches: layoffs, elimination of raises and bonuses, or salary reductions? Which option hurts retention least in a strong labor market?

Will retrenchment help the business get back onto its feet and help your company meet expenses? Still, possible side effects of such a course of action can’t be overlooked as these types of moves are often able to create quite a public backlash. That’s why it’s always good to tread carefully when considering retrenchment strategies.  

3. Hiring: plan versus reality

In many companies, CFOs act as COOs and run HR and recruiting teams. Candidate experience matters, so keeping a close eye on how effectively recruiters manage a swift and friendly process can make a material difference in landing top candidates before your competition.

As the war for talent continues, the hiring budget you may have laid out for a particular role or department may not be realistic. Working closely with hiring managers and department leaders to stay realistic and work through trade-offs will also help minimize surprises when it’s time to negotiate offers.

CFOs have a lot to contribute to the C-suite strategic dialog, and they can also ground that discussion in the actual financial tradeoffs that different choices require. That’s why it’s so valuable to have a solid headcount forecasting framework. We’ve created one that you might find useful – check it out, alongside a how-to guide to use it, here.

We’ve also published a couple of blogs that take a closer look at the location strategy tradeoffs above:

• How to Build a Remote-First Workforce Planning Model: Best Practices for Planning a Cost-Effective Hybrid Workforce
• How to Use a Headcount Planning Model to Determine Your Next Office Location

4. Succession planning

The great resignation isn’t just affecting the rank and file. Leaders are also reconsidering their choices and changing positions at a high rate. Leadership changes often create organizational shockwaves that amplify turnover in the ranks. Some of that might be intentional, as a new leader builds a new team around themselves. CFOs can avoid losing strong performers on their teams by ensuring they and their top lieutenants are thinking and communicating about succession planning. By making it a priority for CFOs to find their timely replacement, performance and morale won’t take a direct hit when a new leader takes over.

5. Listen to employees

If you can’t help but wonder why such a large number of people would quit their job and step away from the security of their positions in an economically turbulent time, the answer is simple: they think they can do better. Many have rebranded the Great Resignation into the Great Reevaluation instead, as the pandemic caused people to reevaluate their values and priorities. 

This change comes with its own set of challenges for employers, of course. But the high turnover rate should be seen as an opportunity for companies to reevaluate what they can and should do better to retain their workers. Given that the labor market is bursting at the seams with millions of open opportunities, it’s vital to act quickly to see if those employees who might resign can be persuaded to stay.

Many employees have put flexibility much higher on their priority list than in the past, as a recent Future Forum study discovered.

76% of those surveyed wanted flexibility on where they work, 93% wanted flexibility on when they work, 56% were open to new job opportunities that may provide them more flexibility, and 21% were likely to jump ship in order to get that flexibility.

To find out what your employees think – from their career prospects, to whether they have adequate management assistance to accomplish their jobs properly – simply ask them what they think the company might do better or differently.

Great CFOs should be able to anticipate and turn most setbacks into an opportunity for their company. Listen to your employees and enhance your work environment; it may be just what you need to convince them that you’re still the best option available.

6. Communicate

As a record-high number of employees are ready to jump ship and go elsewhere, cultivating good communication practices is vital. The more transparent a company is, the easier it is for employees to plan their future accordingly. 

The CFO’s leadership can be considered critical in company guidance. With a strategic approach to financial analysis and projections, they can assume an impactful role – driving the business forward with thoughtful planning and clear direction. Many of the CFO’s decisions can shape a company’s entire workflow: from policies on employee work locations and office space, the systems they use to do their jobs, compensation, to different aspects of company culture. This, in turn, directly influences employee satisfaction and retention rates.

Conclusion

CFOs’ abilities and duties extend far ahead of just managing the company’s finances. In a time of uncertainty, CFOs can make a difference in retaining employees directly and indirectly. Executives who don’t pay attention to the happiness and engagement of managers, in particular, may find themselves in a much more difficult staffing situation than they are now. Leaving managers without the tools they need to attract and retain employees will almost certainly lead to problems sooner or later – the only question is when.