Around the world, senior finance executives believe that their companies need to find more skilled or specialized workers in order to meet business growth targets. Most are focusing more on the need to add staff that would directly boost revenue growth (in business management and sales and marketing, for example) rather than on staff that are revenue-neutral (back office, support). In addition, differences in economic optimism are reflected in the hiring plans shared by executives in specific countries and regions.
These are key themes from the ninth annual survey of senior finance and corporate leaders from large companies around the world, conducted by CFO Research and sponsored by American Express. This year’s study surveyed 651 senior executives at companies with a minimum of US$500 million in annual revenues. The full results of the survey are published as the American Express/CFO Research Global Business and Spending Monitor 2016 (available from CFO Research).
Overall, the global outlook has softened. Outside of a handful of bright spots, such as the United States, most executives completing the survey reported little revenue growth by their companies over the past year. However, worsening outlooks for many countries are offset by strength in a few others, and the global average for increased spending and investment actually shows a slight increase over last year’s survey results.
The survey asked senior executives to identify the hiring priorities for their own companies. The wide range of responses reflects the wide range of levels of economic optimism found in countries and regions. Globally, executives report that they expect their companies’ headcount to increase by 9% on average in 2016; that relatively strong average can be attributed to large increases expected by companies in the U.S., Mexico, and India. (See Figure 1.)
The need to strategically add staff is illuminated by the one-half (51%) of surveyed executives who agree that their company’s performance goals have been impeded by the inability to hire skilled or specialized workers. In addition, 44% say that their companies have been affected by difficulty in hiring sales and marketing specialists, and 43% cite shortfalls in hiring for management positions and for IT staff.
When asked to explain exactly how they plan to attract targeted employees, respondents note that they expect to employ a range of initiatives in order to fill their critical employment needs — including raising wages or salaries, improving benefits offerings, enhancing the working environment, and adjusting working conditions. (See “Top Employee Attraction & Retention Strategies,” below.)
Highlights for each region are provided below.
The survey finds that 71% of respondents in North America (U.S. and Canada) currently anticipate economic expansion in their countries’ economies over the next year. North America–based finance executives expect hiring to increase 12% in 2016. The U.S. (13% increase) is among those countries at the top of the global list predicting an uptick in hiring, while Canadian executives expect a 9% increase.
U.S. senior executives say their companies’ performance goals have been affected most by difficulty in hiring skilled or specialized workers (57%). In Canada, survey respondents cite difficulty in hiring both management and skilled or specialized workers (each 50%). In order to address their hiring challenges, both Canadian (70%) and U.S. (52%) companies will make greater use of temporary or contract workers.
In Latin America, 73% of respondents anticipate economic expansion in 2016, led by large year-over-year optimism increases in Mexico and Argentina. Mexico is near the top of the global list of countries anticipating an increase in hiring (13% increase) followed by Argentina (10% increase) and Brazil (7% increase).
In Argentina (58%) and Mexico (55%) companies say their performance goals have been affected by difficulty in hiring skilled or specialized workers. Brazilian senior executives cite shortfalls in hiring for sales and marketing positions (54%) and for manual or unskilled labor (53%). To combat their hiring challenges, Argentine companies will move some positions from overseas to domestic locations (58%), and companies in Mexico (51%) and Brazil (49%) will make greater use of temporary or contract workers.
Executives in Europe have more moderate expectations for economic expansion, with 62% of respondents expressing optimism. The United Kingdom leads the way, remaining strong at 75%. On average, respondents in Europe expect to see an increase in hiring of 6%. Finance executives in the United Kingdom are most likely to plan to hire (9% increase), followed by Germany (6% increase). Russia and France exhibit much less ambitious plans for hiring, with each country anticipating a 3% increase.
In the United Kingdom (62%) and Germany (43%) companies say their performance goals have been affected by difficulty in hiring skilled or specialized workers. French finance executives cite shortfalls in hiring IT staff (35%), and Russian executives cite difficulty filling manual or unskilled labor positions (32%). To combat their hiring challenges, companies in France (42%), the United Kingdom (41%), Germany, and Russia (each 38%) will make greater use of temporary or contract workers.
In Asia/Australia a majority of respondents (59%) still anticipate economic expansion over the next year, although this represents a continuing annual decline in economic outlook for the region. India once again posts the highest optimism in the region (86%), reflecting aggressive spending and investment plans and a commitment to innovation and growth.
On average, respondents in Asia/Australia expect to see an increase in hiring of 8%. India is among those countries expecting to increase hiring the most (13% increase), followed by Australia (10%), Singapore and Japan (each 8%), China (6%), and Hong Kong (5%).
Finance executives in Hong Kong (66%) say their performance goals have been affected by difficulty in hiring skilled or specialized workers. In India (70%), China (68%), and Japan (53%), survey respondents cite difficulty in filling sales and marketing positions. In Singapore, companies say they have difficulty hiring management and skilled or specialized workers (each 58%). Finance executives in Australia cite difficulty hiring management (55%) and in finding IT staff (53%).
In order to address their hiring challenges, companies in Singapore (59%), Japan (55%), Hong Kong (53%), and Australia (47%) will make greater use of temporary or contract workers. Companies in China will also make greater use of temporary or contract workers (53%), but also will move some positions from overseas to domestic locations (56%), as will companies in India (63%).