Tight talent market requires Australia’s finance leaders to think outside the box
By Paul Lewis, PwC | Private, Assurance Partner
At PwC Australia, we’re in constant conversation with finance leaders about the challenges keeping them awake at night – and working together on solutions to help them rest easier. So it was no surprise when we heard two key concerns raised at our recent Private Business CFO Connect webinar: i) skills shortages in today’s highly competitive jobs market, and ii) how to attract and retain talented people who want varying rewards and working arrangements.
At PwC, we’ve devoted a lot of thought and time to these issues and of course, finance leaders have plenty of insights of their own. They are strategic advisors to colleagues who are grappling with skills shortages in numerous parts of their organisations. And finance leaders are also experiencing hiring and retention challenges within their own finance teams.
So, what are CFOs saying?
The Great Resignation and other challenges
Sentiment at our Private Business CFO Connect Webinar echoed this year’s CEO Survey, where Australia’s executive leaders cited ‘a shortage of talent’ as a major threat to growth (41%, up from 23% last year).
Right now, finance leaders are staring down the barrel of The Great Resignation, and Australia’s job vacancy rate is hovering around its highest level since the original Mad Max was on movie screens. And while anecdotal evidence suggests that employees don’t value security and stability in the same way they did in 2020/1, job ads still significantly outnumber job applications, causing some to suggest that this is more than just The Great Resignation – it’s The Great Poach.
In our webinar, we explained that the war on talent isn’t necessarily just a risk, it can also be an opportunity for finance leaders to position themselves as an employer of choice.
The question is: Where to start?
Attracting and retaining top finance talent in 2022
In a recent survey, we asked 1,800 Australian workers what they valued most from their employer. Remuneration and rewards topped the list, very closely followed by wellbeing. (In fact, wellbeing rated highest for one in five respondents). The same study found 38% of workers plan to quit their jobs this year, suggesting that current employer value propositions (EVPs) are falling well short of expectations.
A revamped EVP is the first – and arguably most important – step to winning the war for talent. Yet, when we surveyed Australia’s top executives, almost half (49%) said they have no plans to re-imagine their EVP.
On the upside, finance leaders at our webinar had their finger on the pulse of employee sentiment. When polled, they echoed what Australian workers told us, pointing to ‘remuneration and rewards’ and ‘wellbeing’ as the top EVP levers to recruit and retain talent.
1. Ratchet up remuneration
Webinar guest speaker Daniel Hunter from Business New South Wales nailed it when he said: “Nothing frustrates me more as a CEO than losing somebody [from our workforce] and then going to market and having to pay 20% more [to replace them]. Why don’t we just give them a pay rise and keep them here?”
This is exactly how proactive finance leaders should think – and act. Some practical suggestions include:
Start budgeting for pay rises within your team and your wider organisation. (US organisations are already paying 5-6% more in some sectors. Australia appears set to follow.)
Consider smaller pay increases, more often. Pay levels are changing faster than anything we’ve seen previously, so annual pay increases may be too slow. Think: biannual pay reviews, with ongoing remuneration conversations.
Pay right, too. Ensure your pay rates are competitive and timely. Annual market data is fast becoming outdated as industries play catch-up after two years of wage stagnation. Expect rapid pay rate changes throughout 2022.
Customise your EVP to suit each employee. Different employees value different things and your EVP should reflect this.
Once customised, ensure you communicate your EVP clearly. Too often employees are unaware of the benefits on offer.
Also, always think outside the box when it comes to remuneration and rewards, and don’t limit yourself to fixed and variable pay. Other offerings, such as childcare subsidies and additional superannuation can add financial benefit.
Finally, embrace pay transparency. Organisations have traditionally been reluctant to disclose pay rates and pay practices but we’re seeing a trend towards sites like Glassdoor, where employees share their pay arrangements with the world. Get on the front foot by owning your organisation’s narrative around pay and equitable pay practices.
2. Foster workforce wellbeing
Harvard Business Review reports 85% of workers experienced a decline in wellbeing in the past two years, while a global study from Coursera cited worker burnout as the number one reason for resignation. Maintaining the physical and mental wellbeing of your workers (with a special focus on work-life balance) is more essential than ever before.
Our recent survey of Australian workers highlighted the importance of hybrid working for finance teams. From the survey of 1800 workers, across all sectors, professions and industries, it was finance professionals – more than any other subset – who most valued hybrid working.
And as Dr Ben Hamer, Future of Work, PwC Australia, explained in our webinar: “When it comes to organisational intervention, our research shows that for every $1 an employer invests in workforce wellbeing, there's an average $2.30 return in productivity.”
Any CFO can tell you those are good returns.
We're here to help
For a more detailed discussion on how to evolve your organisation's EVP and differentiate as an employer of choice, please get in touch with your PwC advisor or contact:
