The last few years have been brutal for corporate executives, who have had to navigate rising inflation, supply-chain shortages, and pandemic chaos. While their outlook this year is more positive, the top brass still have a lot of concerns.
Around 38% of executives say they’re concerned about digital disruption, followed by cyber risks (33%), the cost of energy (25%), and access to capital and financing (25%), according to a recent BCG report on CEO’s views on costs and growth. But the number one topic making executives uneasy is talent—nearly 60% of survey respondents said finding, hiring, and upskilling workers was among their top two concerns when looking at long-term cost-management strategies.
The pandemic upended the labor market, increasing wages and sending employers scrambling to recruit from a limited talent pool. Along with an AI revolution demanding that workers learn new skills to keep up with major tech changes, bosses are stepping back and taking a comprehensive look at their talent strategy and spending, according to Paul Goydan, global leader of Boston Consulting Group’s cost structure program.
That doesn’t mean just doing layoffs and walking away, though. Executives are wondering how to do more with the employees they already have. “They say, ‘We need to grow talent and get talent in the right areas.’ It’s about, ‘Where do I maybe not have the right talent and how do I adjust for that?’”
Around 72% of people management leaders felt their companies did not have the talent they needed, according to a November 2023 BCG report. Many organizations are staring down the barrel of a talent shortage of digitally savvy workers in particular, Goydan says, but it’s not enough to try to fill that gap with new hires. Leaders need to invest in upskilling and training their workforce. That means making long-term investments in talent development to avoid short-term pains, like employees leaving and changing jobs, that could end up costing more.
“The cost of attrition and then hiring new talent is over two times what it costs to just train the employees you already have, and who know the business and the company,” Goydan says.
Executives are confident about their business positioning and success in the short term, Goydan says, but it’s pretty clear leaders are uncertain about how best to upskill and position their workforces for long-term success, especially when it comes to AI.
For their part, however, workers are desperate for direction. According to a January report from management consulting firm Oliver Wyman, 79% of workers want training in generative AI, but only 64% think they’re receiving the training they need, and 57% said their training was inadequate.
“The more I talk to executives, the more it’s clear they find themselves in a complicated situation where they’re having to think about and juggle more than ever,” Goydan says. “That’s just what the market calls for and it’s that competitive.”