The search for top-notch employees is vexing some finance decision-makers, many of whom say competition for talent is increasing or remaining an obstacle. Respondents in a survey by the American Institute of CPAs said employee and benefit costs are a major challenge to their organisations, and some are enhancing benefit programmes and training to recruit and retain workers.
Nicole Vanderslice, CPA, is the CFO at Dolan Automotive Group, which owns four car dealerships in Reno, Nevada. The company recently reopened a Lexus dealership in a new building that is twice the size of the former dealership of luxury vehicles. Vanderslice said the company is expecting to add 40 to 50 full-time employees just for that dealership in the next year.
With technology in cars changing quickly, she said, the cost of employee training and equipment upgrades is likely to eat into profits. She cites regulation, such as a new commerce tax in Nevada, as a further obstacle. Another obstacle: Finding high-quality workers who can explain the technology advances to potential buyers.
Dolan is taking steps to attract and retain employees with several changes since Vanderslice became CFO about 18 months ago. The company is trying to eliminate high-pressure sales tactics – a turn-off to many customers – by switching its sales staff to salaried employees instead of commission-based ones.
New workers receive between four to six weeks of paid training when hired, and they are assigned a mentor for their first two months. For workers in lower-paying jobs, such as washing cars, Vanderslice hopes that improved benefits will help cut down on a turnover rate that hit 30%. The benefits might seem customary for most workers, but car dealerships slashed benefits during the recession of 2008 and 2009 and have been slow to give them back.
“Something as simple as sick days, which we take for granted, didn’t exist, or only in small pockets of the industry,” she said.
Recruiting, turnover issues
Recruiting in Reno, especially in the technology sector, has been difficult for Dolan Automotive. For example, Tesla Motors, the US maker of electric cars and battery products, announced a year ago that it would work with Panasonic to open a battery plant in nearby Storey County.
“Reno has a growing job outlook, but we are competing now with other industries,” Vanderslice said.
Sixty-eight per cent of finance decision-makers report strong competition for workers, with the highest number (43%) saying the recruiting environment is characterised by increased competition for good candidates. An additional 25% said strong competition continues, similar to the end of 2014. Twelve per cent say they have not had difficulty hiring good candidates, and 16% said they have not been hiring.
Chris Wieser, CPA, CGMA, the CFO of Hammer Packaging in West Henrietta, New York, said that once workers remain at the company for a short period of time, they tend to stay. A culture of investing in technology and in the employees, combined with solid benefits, is a selling point, he said.
“We’ll interview a bunch of people to find one good person,” he said. “It’s difficult to find good workers.”
Hammer Packaging, which has annual revenue of $125 million, makes labels for items such as Nestlé bottled water or tea made by Snapple. Wieser is generally optimistic about the US economy, and he expects revenue to grow in the next 12 months. He’s not as optimistic about profits. His company’s customers are regularly asking to receive Hammer’s products cheaper. That’s because those customers are facing their own pricing pressure from retailers.
“The pricing pressure is going to continue unabated,” he said.
Overall business expansion
Questions about hiring were asked in conjunction with a survey that formed the CPA Outlook Index (CPAOI). The measure of nine equally weighted components is 71, four points lower than a year ago but still generally positive. An index rating above 50 indicates a positive outlook.
Overall business expansion plans are down from the third quarter of 2014. Back then, 55% of all businesses expected to expand some, and 13% expected to expand greatly in the following 12 months. The most recent survey included responses from 1,440 high-ranking finance professionals in business and industry, mainly CEOs, CFOs, and controllers. Half of the respondents expect to expand some in the next year, and 10% expect to expand greatly. A year ago, 31% expected to contract a little or remain the same. This year, 37% expect to contract a little or stay the same.
Large businesses are the least expected to grow, with 56% of those with revenue exceeding $1 billion predicting expansion in the next year. That’s down from 71% in the third quarter of 2014. Midsize businesses are also less likely to project expansion. The smallest businesses – those with revenues of less than $10 million – expect to expand slightly more compared with a year ago (61% compared with 59%).
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.