CFOs consistently rate employee retention as one of their biggest challenges. In a 2022 survey of North American CFOs by Deloitte, more than half of respondents cited retaining and attracting employees as their greatest internal challenge, well ahead of operational execution and cost management.

Employee turnover rates have been steadily on the rise since 2010, and voluntary turnover (employees leaving by choice) is a big part of the problem. The average voluntary turnover rate in Canada for 2022 was more than 12%. According to a survey by The Harris Poll, 35% of Canadian companies saw an increase in turnover in 2022, up from only 24% the year before.

Employee surveys cite career development, work-life balance, management behavior, and pay and benefits as their top reasons for leaving. According to The Harris Poll survey, employee turnover cost companies more than $41,000 per year on average, factoring in rehiring costs, lost productivity, etc. For more than 10% of these companies, costs exceeded $100,000.

These high voluntary turnover rates have important implications for CFOs. Replacing employees is time consuming. It disrupts operations and decreases productivity and puts a lot of strain on Human Resources departments. As the above survey shows, this can represent a significant cost for a business. High turnover rates can also lead to a poor reputation, which makes it harder for HR to attract top-tier talent in the future.

Ultimately, employee retention impacts the financial health, stability, and growth of the business. A CFO who retains their current talent will save their company money in the short and long term. So how can CFOs hold on to the talent they have?

There are a number of ways businesses can entice employees to stay:

Provide a path forward

Offer development opportunities to build skills and knowledge, boost job satisfaction, and improve overall engagement. Employee surveys find that employees are less likely to leave when they feel employers are investing in them. You can do this through training and workshops, mentoring programs, tuition reimbursement, online learning resources, and encouraging your employees to attend conferences and industry events.

Encourage a work-life balance

A healthy work-life balance is shown to improve overall job satisfaction. Offering flexible work arrangements, encouraging time off, setting realistic expectations and deadlines, and providing support programs are ways that companies can promote work-life balance.

Hire better managers

The now famous Gallup 2013 “State of the American Workplace” study found that, when it comes to job satisfaction, no amount of money can make up for a bad boss. As the saying goes, people don’t leave companies, they leave managers. Take your time and ensure you’re making the right choice when filling these roles.

Show them the money

Employees cite pay and benefits as important factors when considering new opportunities. Employers should ensure that their compensation and benefits packages can compete with other employers in their industry and region. Employers should regularly conduct market research, seek employee feedback, and measure employee satisfaction to make sure their pay packages remain relevant.

Build a positive work culture
People like to feel valued, supported, and motivated. The best work cultures encourage open communication, reward accomplishments, and celebrate success.

Conduct exit interviews

If your talent is leaving, ask them why. It’s most likely because you’re failing in one of the above areas. Figure out what you’re doing wrong and fix it.
 
 

If current trends continue, employee retention will remain an imposing challenge for CFOs in the coming years. Strategies for acquiring and retaining talent will be a crucial component of any company’s business plan. Successful CFO’s will need to prioritize talent retention and acquisition if they want their companies to remain competitive.