The war for talent will continue through 2031

Over the next decade, board directors and executives around the globe expect attracting and retaining talent to remain a serious challenge.

“Clearly, people and culture are at the top of the agenda,” Jim DeLoach, managing director at Protiviti, a global consulting firm, said. DeLoach is a co-author of the report, Executive Perspectives on Top Risks for 2022 and 2031, released by Protiviti and NC State University’s Poole College of Management on Dec. 9. The findings, based on a survey of 1,453 board members and C-suite executives, were discussed during a media briefing. CEOs have a high level of concern about risks for 2022, which then translates to CFOs, said Mark Beasley, KPMG Term professor of accounting at North Carolina State University and co-author of the report.

The leaders surveyed named pandemic-related government policies and regulation as No. 1 of 10 risks in 2022. But succession challenges, including the ability to attract and retain top talent, was named the No. 2 top risk for both 2022 and 2031. 

“The fact that seven out of the top 10 risks for 2022 have a people component, and six out of 10 for 2031, to me, increases the need for HR to have a strategic lens into the organization,” said Fran Maxwell, global lead of workforce and organizational transformation at Protiviti. Talent challenges, including engagement and upskilling, are “pervasive throughout all industries and organizations right now,” he said.

When it comes to retention, “some organizations make a mistake of making it purely a pay issue,” Maxwell said. A company’s culture, how and where work gets done, and the right learning and development programs are also crucial in winning the war for talent, he said.

“This is the disruptive decade ahead,” said Kim Bozzella, who leads global technology consulting at Protiviti. “I see that disruption coming in a couple of places—the enhanced customer experience center that’s needed to meet our customer demand, better data analytics, and increased productivity through automation. And all of those same things then link into, do we have the people with the skills and can we retain them?”

The study also identified labor costs and impact profitability targets as a top risk for 2022. “In the labor market, it is a workers’ market,” said economist Peter Blair Henry, a W.R. Berkley professor of economics and finance and dean emeritus at NYU Stern School of Business. “The demand for labor is going to continue to push up wages. And Chairman Powell has made it quite clear that the Fed thinks this is actually what’s going to continue to drive the recovery of the American economy. So, they’ve kind of said they’re going to watch this [and] let it continue as long as it’s not too inflationary.”

The key for executives? “Thinking very hard and very systematically about measuring productivity because wage increases don’t have to erode your profit margin if they’re accompanied by productivity increases,” Henry said. Productivity is measured in terms of output per hour, he said. “In order for companies to stay ahead of the curve, they’ve got to find a way to measure output per hour, so [it] can increase at least as fast as wages per hour,” Henry said. “And output varies across companies.”

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See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

The State of Gig Work in 2021, a new report by Pew Research Center, gauges the experiences of workers who take on jobs through online gig platforms. About 16% of Americans surveyed have earned money through a gig platform and provided services including driving for a ride-hailing app and making deliveries for a delivery app. And 31% of current or recent gig workers overall said this type of employment has been their main job over the past year. However, 42% of respondents who have lower incomes said gig work has been their main job. A total of 10,348 Americans responded to Pew's survey. "While proponents praise the gig economy for its flexibility and fueling a sense of entrepreneurship, others have been openly critical about the lack of benefits and job security that can be associated with these jobs," according to Pew's report. 

Going deeper

The economic state of Latinos in America: The American dream deferred, a new report by McKinsey, examines the challenges that exist in the workplace. By 2030, it's projected that Latinos will comprise 22.4% of the U.S. labor force and more than 30% by 2060. Although in the past 10 years, the share of Latinos in higher-paid and skilled occupations has increased by almost five percentage points, in the same occupational categories Latinos are generally paid less than non-Latino White workers, according to McKinsey. "In a scenario of parity, wages for Latino workers could be more than 35% higher and an additional 1.1 million Latinos could join the middle class," the firm noted in the report. 

Leaderboard

Bret Richter was named CFO at Ziff Davis, Inc. (NASDAQ: ZD), effective Jan. 3, 2022. Richter comes to Ziff Davis from MSG Networks, where he served as EVP, CFO and treasurer. Previously, Richter served as the EVP of corporate finance and development at Cablevision Systems Corporation. Richter also served as Cablevision’s SVP of financial strategy and development. Before joining Cablevision, Richter served as president of The Richter Consulting Group, Inc., a privately held advisory firm. He also held various roles at NTL Incorporated (a predecessor of Virgin Media), including SVP of finance.

Daniella Turenshine was named CFO at FIGS, Inc. (NYSE: FIGS), a direct-to-consumer health care apparel and lifestyle brand, effective Dec. 24, 2021. Current CFO Jeffrey Lawrence has decided to retire. Lawrence joined FIGS in December 2020, coming out of retirement to help lead FIGS’ initial public offering earlier this year. Turenshine joined FIGS in 2018 and led FIGS’ finance team for over two years before Lawrence joined the company. She has continued to serve on FIGS’ senior executive team and as a leader on the finance team. Prior to FIGS, she served as VP at Garnett Station Partners. Turenshine also worked in private equity at Avista Capital Partners and in investment banking at Credit Suisse.

Overheard

'The pandemic put a lot into perspective, folks no longer want to be controlled by their calendars—the back-to-back meetings and unclear agendas are contributing to burnout."

—Alessandra Knight, who created the startup Katch, a meeting planner, along with Edwin Akrong, as told to Fortune.