As Vice Chair of PwC US and Co-Leader of US Trust Solutions, Kathryn Kaminsky frequently meets with CFOs to discuss how they manage change, build trust, drive growth, and prepare for the future. She values candid conversations and peer collaboration, believing they spark the most strategic and creative thinking. Recently, talent issues have become a key focus for many CFOs: they are actively planning how to attract top talent and redefine office spaces to accommodate employee needs and "return-to-office" strategies.

The focus on talent is crucial because the current economic environment is more complex than ever. In fact, we may be experiencing the most significant workforce transformation of our time. Today, employees expect experiences that include flexibility, development opportunities, and personalized benefits. Employers must provide personalized experiences or risk losing talent. CFOs, while navigating inflationary pressures and an impending economic downturn, also need to meet growing shareholder expectations and bear the pressure to drive growth and innovation—this is undoubtedly a formidable challenge.

All of this underscores the importance of attracting, retaining, and developing top talent to ensure the enterprise has the capacity for growth and can confidently navigate future changes and thrive. Given that talent may be one of our most powerful assets, especially as we head into 2023, leaders are planning their companies' futures around the workforce.

This is not just about mandates

What will the workplace look like in 2023? Returning to the office is a top issue for CFOs and their leadership teams in the new year. In conversations with CFOs, a consensus is emerging: fully restoring five days a week in the office is no longer realistic. In most discussions, companies do not plan to require employees to come in every day in the new year (and may never do so).

Now and for the foreseeable future, many organizations are adopting hybrid work models. They are thinking more about how to create valuable in-person experiences that foster collaboration and interaction, rather than simply issuing mandates. Leadership teams should consider redesigning office spaces to create environments conducive to collaboration and innovation, while also reducing costs by shrinking their physical footprint.

This refreshed workplace is more attractive to employees and may boost productivity. Interestingly, in conversations with multiple CFOs, I noticed generational differences in workplace preferences. Leaders shared that younger employee groups are more eager for in-person interaction opportunities, so creating quality offline experiences may help retain this group. This highlights the need to incorporate personalization into return-to-office plans rather than adopting a "one-size-fits-all" approach.

Although many discussions about the workplace begin with returning to the office, it is increasingly clear that we cannot fully return to pre-pandemic work patterns. Ongoing change and evolution are underway, which may bring more opportunities for collaboration and flexibility for everyone.

The art of balance

While major workforce transformations are prompting leaders to rethink where, how, and when work happens, they also need to balance external factors such as inflation, tight labor markets, and a potential economic downturn. For example, CFOs report that employee turnover has declined (people are more cautious about changing jobs due to a potential recession), and the high attrition rates during the "Great Resignation" have eased. However, many CFOs still worry about losing talent due to factors like compensation.

Given the tight labor market and record inflation levels, both new and existing employees are demanding higher compensation. To retain talent, many CFOs are offering across-the-board raises, but at levels that are unsustainable. This could lead to future employee dissatisfaction or retention issues. Additionally, rising interest rates are also putting pressure on CFOs—long-tenured employees are leaving due to pension lump-sum payouts. Ultimately, CFOs must retain current talent while planning for the future. I see this as one of many areas where CFOs will need to demonstrate flexibility in the coming year.

CFOs carry many long-term and short-term considerations. These leaders are navigating a period of uncertainty, facing multiple factors such as workforce transformation, economic headwinds, and shifts in talent demographics. Although CFOs do their utmost to drive business growth and strategy execution while protecting profitability, talent remains their top priority as they head into 2023. Because the fact is—with a strong workforce, CFOs and enterprises are more likely to continue innovating, driving growth, and effectively addressing the challenges ahead.