The leaders of Fortune 500 companies view the talent shortage as the No. 1 threat to business
CEOs and CFOs are strategic partners, and both C-suite leaders are worried about talent.
The 68th edition of the Fortune 500 was released this week and corporations on this year’s list generated a record $16.1 trillion in revenue and $1.8 trillion in profits. These gains happened amid inflation, and a second year of the pandemic. However, despite the gains, this year’s Fortune 500 CEO survey found that a talent shortage was viewed as the No. 1 threat to their business.
The Great Resignation is taking its toll as more than two-thirds of CEOs said they had experienced high rates of attrition among employees. In hopes of retaining staff, 93% said they’ve offered more flexibility in work times and locations, 79% gave their leaders training on how to effectively engage employees, and 60% said they’ve strengthened the company’s stated purpose.
Meanwhile, CFOs are voicing the same concerns. Talent was the most often cited internal risk by CFOs, including retention, even more so than attracting new employees, according to Deloitte’s Q1 2022 CFO Signals survey. This focus on talent has been evident as major companies report their quarterly earnings. For example, Alphabet CFO Ruth Porat said during the company’s Q1 2022 earnings call: “The most visible reflection of our focus on long-term performance is our continued investment in talent and compute capacity across the company.”
I recently had a conversation with Larry Harris, a professor at the USC Marshall School of Business, about the talent shortage concerns of CEOs and CFOs. The COVID-19 pandemic may have spurred the Great Resignation as employees seek more fulfilling careers, Harris explains. But an underlying labor force issue exists—there will be more older people retiring than younger people entering the labor force, he predicts.
“What are the cost-saving methods when dealing with labor shortages?” says Harris, a former chief economist with the U.S. Securities and Exchange Commission. “There’s really only one. You’ve got to automate.”
He continues, “Obviously, the industries vary by the degree in which you can switch capital for labor. So, laborers in the business of sifting through and editing manuscripts for a publisher, I don’t think much automation is ever going to help. Maybe just a spelling or grammar check. In comparison, if the business involves the production of semiconductors, for example, “parts of that process can be automated even further,” he says.
Due to the Memorial Day holiday, the next CFO Daily will be in your inbox on Tuesday. See you next week.
A new report released by Tradeshift, a supply chain finance platform, gauges attitudes towards automation among 500 finance and accounting professionals, in the U.S., U.K., France and Germany. An average of 45% of frontline finance workers have seen the level of investment in automation within their department accelerate over the past 12 months, according to the report. And an average of 52% thought that investment would accelerate further over the next 12 months.
Here's a good Fortune weekend read:
Who is the real Do Kwon? The 30-year-old founder became a crypto sensation, then his stablecoin crashed and burned destroying billions by Taylor Locke. Read about the founder of Terraform Labs and its cryptocurrencies TerraUSD (UST) and Luna. "In mid-May each collapsed to nearly $0 and wiped out $60 billion of investors’ money in hardly more than the blink of an eye," Locke writes.
Some notable moves this week:
Andre J. Fernandez was named CFO at WeWork Inc. (NYSE: WE) a global flexible space provider, effective June 10. Most recently, Fernandez served as EVP and CFO of NCR Corporation, which provides enterprise software. Prior to NCR Corporation, he held executive positions as president and CEO of CBS Radio; president and COO of Journal Communications, and prior to that, CFO at Journal Communications; and a variety of global financial leadership roles at the General Electric Company.
Thomas Allen was named CFO at Membership Collective Group (NYSE: MCG), effective June 23. Allen joins MCG from his current role at Morgan Stanley as a managing director in equity research, where he has led US Gaming, Lodging, and Leisure sector research since 2013. He was ranked in the Top 3 in the Institutional Investor All Americas poll. Prior to his role at Morgan Stanley, Allen worked in Capital Markets at Bank of America.
Michelle Gilson was named CFO at Arcellx, Inc. (Nasdaq: ACLX), a biotechnology company. Gilson joins Arcellx from Canaccord Genuity, where she most recently served as managing director and senior equity research analyst covering biotechnology companies. Prior to joining Canaccord, she held biotechnology equity research roles at Jefferies, LLC; Instinet, LLC (Nomura Securities); Oppenheimer & Co. Inc.; and Goldman Sachs.
Schond L. Greenway was named CFO at Mind Medicine Inc. (Nasdaq: MNMD), a clinical stage biopharmaceutical company. Greenway joins MindMed after serving as CFO of Avalo Therapeutics, a precision medicine clinical stage biopharmaceutical company. He previously served as VP of investor relations at Mesoblast. Greenway served in a similar role at Halozyme Therapeutics, Inc. and in various roles at investment banking firms Morgan Stanley and Barclays Capital.
Erica Naidrich was named CFO at Troika Media Group, Inc. (Nasdaq: TRKA), effective immediately. Christopher Broderick, previously CFO and COO, will remain as COO of Troika Media Group. Prior to joining Troika Media Group, Naidrich served as VP of accounting and controller for Madison Square Garden Entertainment Corp, a leader in live sports, entertainment and programming. Prior to her role at MSG, she held controller roles at technology and e-commerce companies.
"We’re in a bear market. And I think that’s good. It’s good because it’s going to clear the people who were there for the bad reasons."
—Bertrand Perez, CEO of the Web3 Foundation, on the recent crash in the digital coin market, as told to CNBC at the World Economic Forum in Davos, Switzerland.
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