Executives tend to keep tabs on what their industry is up to, since tasks ranging from how to get better versed in cybersecurity and how to lead through a potential downturn loom over their heads. Some surveys offer insights, but others may leave readers wondering why. In a survey released by Gartner last week saying that CFOs were actually planning to increase salaries, despite all other signals and sentiment suggesting otherwise, we thought we’d dive a little deeper.
The survey, which polled 279 CFOs in December 2022, found that 86% of CFOs “plan to increase employee compensation in 2023, despite recession fears,” as finance chiefs try recover from the difficulty of attracting top-tier talent over the past few years, according to Gartner.
“Many CFOs are still trying to shake off the negative ramifications from talent shortages since 2020, and they know they must invest in their staff to retain them,” Alexander Bant, chief of research in the Gartner Finance practice, wrote. Bant added that while finance chiefs can’t afford to keep compensation in line with inflation, thanks to the cooling labor market, they conveniently won’t need to.
How will these 279 finance chiefs be able to increase compensation even though they can't afford to do so in a way that keeps pace with inflation? The research firm says “build leaner and faster businesses,” which has echoes of the rank-and-yank business philosophy developed by GE.
Gartner’s study comes at a time when headline after headline point to layoffs across numerous sectors, most notably in technology. Finance departments have also been hit; Boeing, despite saying it planned to continue hiring, signaled that it would be laying off portions of its finance workforce. Stanley Black & Decker, an industrial tool company, also slashed a “large portion” of its finance workforce for cost-savings measures.
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The survey also cites data from December 2022, and while that’s not too dated, it is pre-earnings season and before further rate hikes.
But it’s not the only data that may have made readers scratch their heads over the past few weeks. On Feb. 7, Fed Chairman Jerome Powell said, “The labor market is extraordinarily strong,” at the Economic Club of Washington, pointing to the need for further rate increases. The jobs report released at the end of January showed that there were 11 million on the market, with a record 517,000 added in the last month.
Two considerations: One, jobs data is lagging. It’s backward looking, as Bloomberg’s John Authers points out. Two, don’t get too caught up in a single data point or survey.
If you, a finance professional, were bewildered by the survey—whether you were laid off or haven’t seen that raise yet—be free and disregard the data point. We’ll keep our eyes on more of the trends and offer a cautious eye to this self-disclosing survey.—KT