CFOs continue talent retention battle

Dive Brief:

  • CFOs looking to attract and retain the right kind of talent amidst inflationary pressures, rising interest rates and other economic tensions need to “double down on recognition and meaningful work for employees,” said Jessica Bier, managing director of Deloitte Consulting, in an interview. 
  • In order to attract and retain viable talent to keep business afloat, 71% of CFOs indicated that a flexible workplace environment was their approach, 63% said clarity around career development and growth opportunities and 62% pointed to increased salaries, per the second wave of data in the Q3 CFO Signals report.
  • The report also revealed that CFOs who took steps to alter, reduce or streamline the type of work their finance organizations performed saw several benefits throughout the enterprise — 78% said one benefit was more time spent on higher-value activities and 71% indicated greater use of technology was another. Contrastingly, only 20% saw talent retention as a benefit, and even less (10%) saw higher quality talent as one.

Dive Insight:

The managers and workforce of financial departments are looking for five main things, said Bier, per the report — those being work environment flexibility, career growth and development, salaries, meaningful work and recognition, she said.

“As we think about the workforce experience, every CFO is also the chief talent officer,” Bier said. “Your HR business partner can support you but at the end of the day the way your managers work and the way you connect people to the work that they’re doing — that’s the CFO’s job to set that tone.”

In today’s macroeconomic environment, with inflation at its highest point in nearly four decades, meeting the expectations and needs of finance employees is all the more expensive, and important. 

One misconception, Bier said, is that a recession means workers will be happy just to have a job. “The people in the workforce who are the ones you want to keep, are the ones who are always going to have options,” she said. 

Talent retention continues to be a multifaceted challenge for CFOs and remains top of mind. Over half of CFOs (54%) cited hiring and retaining staff as the most difficult task over the next 12 months, according to a July Gartner study.

Why 67% of nurses want to quit—and what would make them stay

As RNs struggle to work through staffing shortages, their job satisfaction has sharply declined, with 67% saying they plan to leave their jobs within the next few years, according to a survey from the American Association of Critical-Care Nurses (AACN) published in Critical Care Nurse.

RNs cite poor work environments

For the survey, AACN collected responses from 9,862 nurses, 9,335 of which met the study criteria of being currently practicing RNs, in October 2021. The mean age was 46.5 years, and the mean years of experience was 17.8 years.

Of the participants, 78.3% worked in direct care, and 19.4% worked in a Beacon unit, meaning that their unit had been recognized by an AACN Beacon Award for Excellence. Half of the participants said they spent 50% or less of their time caring for Covid-19 patients, while the other half said they spent 50% or more.

To measure the health of a work environment, AACN looked at six standards:

  • Skilled communication
  • True collaboration
  • Effective decision-making
  • Meaningful recognition
  • Authentic leadership
  • Appropriate staffing

Overall, AACN found that nurses’ perceptions of quality on these six measures had declined across the board since the organization’s 2018 survey.

In particular, appropriate staffing was the lowest rated of all the standards at 2.33 out of 4, which is the lowest rating the standard has received since AACN first began the survey in 2006. Only 24% of RNs said their units had the right number of nurses with the right knowledge and skills more than 75% of the time—down from 39% who said the same in 2018.

In addition, there was a significant decline in how RNs rated the quality of care in their organizations and their units. Only 16% rated their organizations’ quality of care as excellent (compared to 24% in 2018), and 30% rated their units’ quality of care as excellent (compared to 44% in 2018). Over 50% of nurses said quality of care in their organization or unit has gotten somewhat or much worse over the last year.

Many nurses also reported difficulties with their physical and psychological well-being in the survey. For example, less than 50% of RNs said they felt their organization values their health and safety, a significant decline from 68% who said the same in 2018.

In addition, 40% of participants reported that they were not emotionally healthy. The percentage of RNs who reported experiencing moral distress also doubled from 11% in 2018 to 22% in 2021.

A significant portion of RNs also reported experiencing verbal abuse, physical abuse, sexual harassment, or discrimination over the past year. Of the 7,399 RNs who answered this question, 72% said they had experienced at least one negative incident, with verbal abuse being the most common at 65%, followed by physical abuse at 28%.

RN job satisfaction

Only 40% of RNs said they were “very satisfied” with their job, down from 62% who said the same in 2018. Further, a significant number of RNs in the survey reported planning to leave their jobs within the next few years.

Overall, 67% of RNs said they planned to leave their current position within the next three years, compared to 54% in 2018. Of this group, 36% said they planned to leave within the next year, with 20% planning to leave within the next six months.

According to the respondents, the top factors that could lead them to reconsider their decision to leave their job were a higher salary and more benefits (63%), better staffing (57%), and more respect from administration (50%).

“Without improvements in the work environment, the results of this study indicate that nurses will continue to exit the workforce in search of more meaningful, rewarding, and sustainable work,” the survey’s authors wrote. “It is time for bold action, and this study shows the way.” (Firth, MedPage Today, 8/3; Ulrich et al., Critical Care Nurse, 8/1)

Hard truths on the current and future state of the nursing workforce

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Concerns about an imbalance in supply and demand in the nursing workforce have been around for years. The number of nursing professionals nationally may be healthy, but many nurses are not in the local areas, sites of care, or roles where they’re needed most. And many of today’s nurses don’t have the specialized skills they need, widening the existing gap between nurse experience and job complexity.

As a result, gaping holes in staffing rosters, prolonged vacancies, unstable turnover rates, and unchecked use of premium labor are now common.

Health care leaders need to confront today’s challenges in the nursing workforce differently than past cyclical shortages. In this report, we present six hard truths about the nursing workforce. Then, we detail tactics for how leaders can successfully address these challenges—stabilizing the nursing workforce in the short term and preparing it for the future.

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Amid competitive US labor market, employers are ramping up health benefits, survey finds 

As employers plan for 2023, attracting and retaining talent is top of mind amid a competitive U.S. labor market. That’s led to over two-thirds of companies planning to enhance employee health and benefit offerings next year, according to survey results from Mercer published July 6.

The survey was conducted April 26 to May 13. In total, 708 organizations participated, from all industries and of all sizes ranging from fewer than 500 employees to more than 5,000.

Nine things to know:

  1. Among large employers, 70 percent are planning to enhance health and benefit offerings in 2023.
  2. Among all employers, 61 percent are conducting surveys on employee benefit preferences.
  3. Among large employers, 41 percent currently provide a plan option with a low deductible or none at all, and 11 percent are considering it. 
  4. Over half of employees say no remote or hybrid work is a deal breaker when considering to join or stay with an organization. Among all employers, 78 percent now allow employees to work from home regularly, compared to 26 percent in 2021.
  5. Among large employers, 52 percent will offer virtual behavioral healthcare in 2023, and 40 percent will offer a virtual primary care physician network or service.
  6. Though 64 percent of employers are not prioritizing a single employee group for benefit enhancements, 35 percent say they are focusing on hourly and low-wage employees.
  7. Nearly one-third of employers will offer benefits such as fertility treatment coverage and adoption and surrogacy benefits by 2023, and almost another third are considering it.
  8. Among all employers, 70 percent currently offer or plan to offer paid parental leave in 2023.
  9. Among all employers, 75 percent offer or plan to offer tuition reimbursement in 2023.

Job openings, quits rate fell slightly in May

Job openings fell slightly in May as demand for workers remained near record highs, according to data released Wednesday by the Labor Department, even amid growing concerns of a potential recession.

The number of open jobs listed in the U.S. on the final business day of May totaled 11.3 million, dropping from 11.7 million in April after seasonal adjustments. Though job openings fell in May, hires, layoffs and quits stayed roughly even with their April numbers, according to the May Job Openings and Labor Turnover Survey (JOLTS) report.

The JOLTS report showed a labor market still stacked strongly for workers in May, a month when the U.S. added 390,000 jobs and saw the jobless rate hold strong at 3.6 percent. Despite the decline in job openings, there were still almost two open gigs for each unemployed American.

That mismatch can give workers many opportunities to find new jobs with better compensation and career opportunities than their current ones.

“This is not what a recession looks like. The May 2022 JOLTS data obviously lags what’s happening in the labor market presently, but all signs are that it remains strong,” wrote Nick Bunker, research director at Indeed.com, in a Wednesday analysis.

“If the labor market were quickly and suddenly taking a downturn, we would see employers’ demand for new hires drop and their willingness to let workers go increase. For now, we aren’t seeing a sudden move in either direction.”

Businesses hired roughly 6.5 million workers and lost 6 million in May, both in line with April totals. The percentage of the workers who quit their jobs in May fell to 2.8 percent, just 0.1 percentage points from a record high of 2.9 percent set earlier this year.

With ample jobs available and people still eager to leave in search of better work, businesses have avoided laying off employees over fears they could be hard to replace. Roughly 1.4 million workers were laid off in May, slightly higher than April’s total of 1.3 million. But the percentage of the workforce laid off by their employers held even at 0.9 percent, which is below pre-pandemic levels.

“Despite continued headlines about layoffs, particularly in the tech sector, the layoff rate remains low,” Bunker explained. “This is the 15th straight month that the layoff rate has been below its pre-pandemic bottom.”

The steady strength of the U.S. job market helped propel a rapid recovery from the depths of the COVID-19 recession through much of 2020 and 2021. The U.S. is fewer than 1 million new jobs away from replacing the 21 million jobs lost to the onset of the pandemic, and the speed of the pandemic recovery has helped fuel rapid wage growth, particularly for low-earning workers.

Even so, many economists — including Federal Reserve officials — fear the strength of the job market could add further fuel to inflation already at four-decade highs. While steady job gains are good for the economy, the intense competition for workers has made it difficult for many firms to stay adequately staffed and keep up with both higher wage demands and rising prices.

Fed Chairman Jerome Powell and many economists are hopeful that higher interest rates and the fading effects of fiscal stimulus can help reduce job openings — and the pressure they put on wages — without wiping out job gains.

The Fed has boosted its baseline interest rate range by 1.5 percentage points from near-zero levels in January and is expected to hike by another 2 percentage points by the end of the year. Higher interest rates are meant to reduce inflation by slowing the economy enough to force businesses to stop raising prices and wages.

Even so, he has acknowledged it will be difficult for the Fed to avoid slowing down the labor market into a standstill as the central bank boosts interest rates to fight inflation.

“The labor market conditions [Powell] has described as ‘extremely, historically’ tight and ‘unsustainably hot’ persisted in May,” wrote Julia Pollak, chief economist at ZipRecruiter, in a Wednesday analysis.

“Employers are hanging onto the workers they have in a tight labor market where replacing them is unusually costly.”

The June jobs report, set to be released Friday, will give a most recent view into how well the labor market has held up amid Fed rate hikes. Economists expect the U.S. to have added roughly 268,000 jobs last month, according to consensus estimates.

“There will be a time when the US labor market takes a downturn, jobs are shed at a higher rate, and workers stop quitting their jobs. But that time has yet to come. The labor market remains very tight and very hot. That may change, but it hasn’t yet,” Bunker wrote.

Companies expand CFOs’ role to retain them amid high demand

The pressure is on for boards to hold onto chief financial officers as firms face the prospect of an economic slowdown and intense competition for talent.

Demand for finance chiefs continues to be high in U.S. businesses, according to a July 4 report from The Wall Street Journal. Data from Russell Reynolds Associates indicates that CFO turnover at companies in the S&P 500 rose to 18 percent in 2021, compared to 15 percent in 2020 and 14 percent in 2019. 

Some new strategies call for broadening CFO responsibilities or elevating their positions altogether to retain top executives, according to Joel von Ranson, head of recruitment firm Spencer Stuart’s global functional practices. 

“Companies create these broader roles and titles to engage and recognize and motivate the very best of the best,” Mr. von Ranson said. 

CFOs at companies in the S&P 500 and Fortune 500 average about five years in their job, according to executive search firm Crist Kolder Associates. Expanding the CFO role allows organizations to create opportunities to retain key talent past the five-year mark. 

In 2021, just under 8 percent of chief executive officers at companies in the S&P 500 and Fortune 500 came from the CFO seat. 

Stay Vigilant, CFOs: Your Compensation Strategy Matters More Than Ever

https://www.forbes.com/sites/paulmcdonald/2022/06/15/stay-vigilant-cfos-your-compensation-strategy-matters-more-than-ever/?sh=697b638f18f7

There’s been some speculation in the news lately that wage growth in the United States might be topping out. This could be the case for some employers, especially smaller companies that don’t have much more give in their current staffing budget. However, don’t think for a moment that compensation is suddenly losing its power as a tool to help secure top talent in a market where unemployment is low, the quits rate is high, and there are nearly twice as many open jobs as there are available workers.

The suggestion that employers are becoming more conservative in their salary offers also might be hopeful thinking for those trying to control rising inflation. Federal Reserve Chair Jerome Powell, for example, recently referred to the labor market as “unsustainably hot.”

While some big companies may be considering cooling down on hiring, some are paying higher wages to median-salaried employees than they did before the pandemic. (Significantly so, in some cases — think six figures.) And although the U.S. economy has seen some job-shedding in recent months, layoffs overall are at their lowest level on record.

The takeaway for chief financial officers (CFOs) is that you can’t afford to sit back and wait on wages. You can never really be sure when or if it will “top out,” especially in this unusual economy and candidate-driven hiring market. Your business needs to be prepared to provide standout compensation packages to hire stellar candidates — and keep your best people, too.

Compensation remains the not-so-secret weapon for besting competitors targeting the same talent, including the high performers who are already part of your organization. The trick is to use compensation as an offensive strategy that gives you more control. Following are three ways to help your organization make that pivot:

1. Review Current Employees’ Compensation Levels Now

While its name has been overexposed in the media, the Great Resignation is real and still in motion. Some are even referring to the phenomenon now as the “Forever Resignation”— a cycle of voluntary turnover that may never end. Buzzy labels aside, the pandemic has fundamentally changed the way people look at work, and what it means to them. They aren’t as willing to put up with things they don’t like about their job — like a low rate of pay. They know they have options, and they will seek them out.

Nearly two-thirds of U.S. workers who left their jobs in 2021 cited insufficient compensation as a reason for quitting, according to a Pew Research Center survey. To avoid turning your company’s valued staff into part of the “Class of 2022,” don’t wait for them to ask for a raise. Make sure to review their current compensation and if needed, bump it up, or extend another financial perk, like a spot bonus or paid time off.

And, if you find that employees are beating you to the punch, encourage an open discussion about pay. For example, if this person’s job responsibilities recently expanded or they’ve gained new skills, an immediate raise (or the promise of one soon) may be in order. If the employee is just feeling the crunch from inflation, offering a flexible work arrangement to reduce the burden of a costly commute might be an alternative solution for in-office workers.

2. Designate an Expert to Oversee the Compensation Process

In addition to taking stock of staff compensation levels as soon as possible, consider putting a formal process in place to ensure these levels will be monitored and adjusted proactively.

Compensation analysis will require, among other things, keeping tabs on the latest salary research and market trends, analyzing and updating job descriptions, and setting pay ranges and communicating them to staff. Look for someone in your human resources organization who could take the lead on managing this critical process. Because the market has changed so fast, it’s critical to keep continual tabs on what’s happening with pay rates and hiring dynamics for your company’s most mission-critical roles.

3. Watch Out for Pay Compression

The need to pay higher salaries to top candidates is in many cases resulting in new hires earning more than existing staff. Even small differences in pay between employees who are performing the same job, regardless of their skills or experience, can turn into big staffing headaches — namely, turnover. Feelings of resentment and disengagement can especially rise in the workforce when new hires with less experience are paid the same as, or more than, tenured employees in the same positions, or when individual contributors are paid more than their managers.

Inflation, competition for in-demand talent and the company’s failure to keep up with current market rates for compensation can all lead to pay compression. Conducting regular pay audits as described above and quickly bringing up the base salary of underpaid employees are solutions for resolving and, ideally, preventing, pay compression.

When raises aren’t an option, consider offering compelling non-monetary perks such as upskilling opportunities, better benefits, health and wellness programs, a more welcoming corporate culture, or all of the above.

That said, you can be sure that, no matter what, leading employers will continue to pay salaries that will attract the top talent they need to drive innovation and stay competitive.

The tight labor market is impacting provider volumes

https://mailchi.mp/8e26a23da845/the-weekly-gist-june-17th-2022?e=d1e747d2d8

Health systems are on edge after two quarters of shaky financial performance, with skyrocketing labor and supply costs compressing margins. But in addition to cost challenges, many are also reporting a softening of demand, with profitable surgeries and other procedures and diagnostics being hit hard. Some report seeing a drop in elective services (as one COO told us, “We may have finally worked our way through the backlog of delayed procedures from 2020 and 2021”), but in many cases, hospitals are missing the staff necessary to open up much-needed surgical capacity.

One system reported having to shut down operating rooms due to a lack of surgical techsEven more pressing is a shortage in anesthesia capacity, with systems across the country having trouble staffing anesthesiologists and nurse anesthetists. Some practitioners have been rolled up into large, investor-owned groups, which then have taken providers out-of-network for key insurers.

But regardless of ownership structure, a shortage of providers has led to “shoestring staffing” with little ability to cover absences or departures, leading to last-minute cancellations of procedures. Pediatric hospitals have been particularly hard-hit. Most rely on subspecialty-trained anesthesiologists, and as one physician leader pointed out, children’s hospitals use anesthesia not just for surgeries, but also for diagnostics, radiation therapy and other treatments where sedation isn’t required for adults. 

All in, the shortage of anesthesiologists is leading to critical treatment delays and exacerbating revenue concerns. Moreover, systems are facing frustrated consumers, who care little about the complexities of the healthcare workforce shortage and supply chain challenges that led to an abrupt cancellation of their care. 

Hospitals face increasing competition for lower-wage workers 

https://mailchi.mp/8e26a23da845/the-weekly-gist-june-17th-2022?e=d1e747d2d8

Although the nursing shortage has attracted much attention in recent months, the healthcare workforce crisis is hitting at all levels of the labor force. As the graphic above shows, the attrition rate for all hospital workers in 2021 was eight percentage points higher than in 2019. 

Among clinicians and allied health professionals, certified nursing assistants (CNAs) have the highest turnover levels. Given the demands of the job and relatively low pay, CNA openings have been consistently difficult to fill. But it’s become even harder to hire for the role in today’s labor market as job openings near an all-time high. 

Although labor force participation rates have rebounded to 2019 levels, pandemic-induced economic shifts have led to a boom in lower-wage jobs. In 2021 alone, Amazon opened over 250 new fulfillment centers and other delivery-related work sites. The company is competing directly with hospitals and nursing facilities for the same pool of workers at many of these new sites.

In fact, our analysis shows that more than a quarter of hospital employees currently work in jobs with a lower median wage than Amazon warehouses. Health systems have historically relied on rich benefits packages and strong career ladder opportunities to attract lower-wage employees, but that’s no longer enough—Amazon and other companies have ramped up their benefits, such that they now meet, or even surpass, what many hospitals are providing. 

The time has come for health systems to reevaluate their position in local labor markets, and better define and promote their employee value proposition.