America’s labor and inventory shortage: How organizations are responding
All across the U.S. organizations are facing two large shortage crises – Labor and inventory.
The COVID-19 pandemic brought many changes to the workforce, one of the largest being the Great Resignation. This is an ongoing trend of employees voluntarily leaving their jobs in search of more money, flexibility and satisfaction. Employers are struggling to find, attract and retain qualified talent.
However, staffing isn’t the only sourcing issue organizations are managing. Since the onset of the pandemic, many materials have become more difficult to secure, causing inventory problems.
Recently, CFO Strategic Partners released a survey to discover how these shortages have affected organizations and what they’re doing about it.
Not surprisingly, an overwhelming number of organizations who participated in the survey are struggling with staffing shortages and inability to find talent to optimize profits. To make matters worse, many organizations are facing supply chain issues and are looking for additional suppliers.
Overall, most survey participants shared their business has increased prices or they were considering it.
This survey was answered by people from a wide range of industries including construction, professional services, healthcare, hospitality, manufacturing and more. See below for a full breakdown of our results.
Openings are there, but the talent is missing
Our survey participants are struggling to source qualified talent. Seventy-five percent of respondents said they simply can’t attract staff, while another 38 percent are having team members actively recruited away. Only 13 percent shared they weren’t currently experiencing issues. One participant shared their employees were leaving for higher paying markets as more remote opportunities have become available.
Short staff = sales coming short
Staffing issues have led to loss in revenue. Less than 20 percent of respondents shared staffing challenges haven’t negatively impacted their business. With staff spread thin, organizations aren’t reaching their optimal performance level.
If you’re going to stay competitive, wages need to go up
Only six percent of survey participants haven’t had the need to increase wages. Across the board, organizations are needing to budget for wage raises. Nearly 70 percent of respondents increased starting wages, 50 percent increased wages for everyone and 38 percent are already planning for more than cost-of-living wage increases in 2022.
Other employee retention ideas
When asked what other tactics were being used to retain employees other than wage increases, respondents shared:
- More flexibility in schedules and work location
- Remote work opportunities
- Bonuses such as sign-on, referral, award and COVID vaccination bonuses
- PTO for all staff members
- Continually working on company culture with special treats and office socials
- Compensating employees for all work-related meals
Many organizations are looking for additional suppliers
Almost half of our survey participants are changing their procurement and inventory policies due to the material shortages. A majority of these organizations are seeking to source from more suppliers, while 20 percent are inventorying more product and seven percent are increasing order volumes.
Prices are increasing and the forecast might call for even more
A majority of our survey participants have increased prices or are at least considering it. A small percentage shared their clients understand the increases, but more are concerned customers may turn away. Thirty-one percent of respondents said that they’ve already raised prices, but may need to do so again. Almost 20 percent claimed they were unable to increase prices. One participant in the healthcare industry disclosed they were able to and have increased private pay, however, a larger part of their business is funded by Medicare and Medicaid, which haven’t given increases.
Do you need help overcoming challenges born as a result of the pandemic? CFO Strategic Partners has significant experience in helping organizations overcome unexpected CFO turnover and leading executive searches. Our team of experienced, on-demand outsourced CFOs can provide the information and support you need. Email us at email@example.com or fill out the request for information form here.