CFO Survey: With Hiring Their Top Concern, Firms Want More Skilled Immigrants

Professor John Graham finds CFO optimism remains high

September 12, 2018
Finance, Management
CFO Survey, Sept. 2018

CFOs are worried about hiring and retaining skilled workers, and want the U.S. to make it easier for students from overseas to obtain work visas, according to the Duke University/CFO Global Business Outlook.

The survey also found U.S. firms affected by trade tariffs plan to cut spending.

The survey has been conducted for 90 consecutive quarters and spans the globe, making it the world's longest-running and most comprehensive research on senior finance executives. The survey ended Sept. 7. Results are for the U.S. unless stated otherwise.

Immigration Reform

More than 82 percent of U.S. companies believe the government should routinely grant H-1B work visas to foreign science and technology undergraduate students studying in the U.S. And 77 percent support the routine award of green cards to foreign graduate students who are pursuing advanced science and technology degrees.

These results reflect longstanding support for immigration among business leaders, the survey having drawn similar responses in 2013.

“The current constraints on hiring immigrants pose considerable risk to the U.S. being able to sustain 3 percent-plus economic growth,” said Cam Harvey, a founding director of the survey, who teaches a technology innovation course at Duke’s Fuqua School of Business. “Given the tight labor market, firms are most concerned about securing the right talent. The CFOs are loud and clear that immigration reform will allow them to fill some gaps with skilled immigrant labor. These needs rise above the more general political debate.”

Tight Labor Market Is Top Concern

The proportion of firms indicating they are having difficulty hiring and retaining qualified employees is at a two-decade high, with 53 percent of CFOs calling it a top four concern. That’s up sharply from the 41 percent who said the same thing last quarter.

“The tight labor market continues to put upward pressure on wages,” said Chris Schmidt, senior editor at CFO Research. “Wage inflation is now a top five concern of U.S. CFOs.”

Employees are willing to leave their jobs for greener pastures. Over the past 12 months, U.S. CFOs report they had to replace 14 percent of their workforces, compared to 13 percent turnover in 2016.

Among companies that list hiring as a top concern, 56 percent have increased salaries to improve their chances of hiring and retaining workers; 31 percent have increased HR budgets to better advertise positions; 29 percent have increased vacation or flex hours; and 21 percent have improved health care benefits.

Fast Pace of Change Shortens Planning Horizon

The fast pace of technological change and the economic environment is hampering the ability of companies to plan for the future.

U.S. firms indicate that five years ago they could effectively plan 3.5 years into the future. In the current environment, they say they can only plan 2.3 years out. Coincident with this shorter planning horizon, CFOs indicate the projects they adopt now have an expected life of 4.6 years, compared to a 6.2-year life for projects they initiated five years ago.

“Some CFOs said they would hesitate to buy a machine with that will likely be obsolete within a few years,” said John Graham, a finance professor at Fuqua and director of the survey. “If companies hold off on investing because of the fast pace of change, this may damage long-run growth prospects for the overall economy.”

This accelerated obsolescence is on top of widespread concern that pressure to hit quarterly earnings targets leads to a short-term focus among public companies.

The survey found the shortening of planning horizons is even more severe among private firms than public companies. Other regions of the world have experienced similar or greater reductions in the planning horizon. Over the past five years, the planning horizon has fallen by 3 years in Africa, by 1.3 years in Europe and Latin America, and by 1.2 years in Asia.

Trade Wars

U.S. companies are evenly split about the effects of ongoing tariffs and trade wars. Firms that say they have been negatively affected plan to reduce their capital spending by 6 percent due to tariffs and trade wars, compared to a 5.7 percent increase averaged across all firms.

The trade situation is also negatively affecting companies elsewhere in the world. African, Asian, and European firms adversely affected by the trade situation say they expect to lay off employees in response.

Optimism Remains High

The Optimism Index about the U.S. economy declined to 70 this quarter, compared to an all-time high of 71 last quarter, on a 100-point scale. CFO optimism about their own firms’ financial prospects increased to 71.4, the highest level since 2007.

Optimism fell in Africa, Europe, and Latin America and held steady in Asia. The survey’s CFO Optimism Index is an accurate predictor of future hiring and overall GDP growth.

Global Results

Canadian optimism fell to 58 this quarter from 62 last quarter, on a scale of 0 to 100. Canadian companies say they can only plan 2.3 years into the future now, compared to planning 5.5 years out as of 2013.  

Optimism in Europe plummeted to 58 this quarter, down from 68 last quarter. Optimism is about 50 in the U.K., Italy, and Spain, while optimism remains 60 or higher in France, Germany, and the Netherlands. Capital spending and employment are both expected to grow about 2 percent over the next year. The top concern among European CFOs remains attracting and retaining qualified employees, edging out economic uncertainty and regulatory and government policies.

Concerns about employee morale round out the top five concerns. Among firms that list hiring challenges as a concern, 52 percent of European companies indicate they have increased wages to attract and retain workers, 34 percent have increased HR budgets, and 17 percent have increased vacation and flex hours. In contrast, 42 percent of companies say they have not made any changes to attract and retain employees.

European firms adversely affected by the trade situation expect to reduce employment and capital spending by 4 percent  Due to rapid changes in technology and in the economy, the typical life of a new project has fallen from 6 years (as of 2013) to an expected life of 4.6 years today.

Optimism in Asia held steady at 60 this quarter. More than half of Asian CFOs listed economic uncertainty as a top concern. Other concerns include employee productivity, difficulty attracting qualified employees, and rising wages. Capital spending is expected to grow about 5 percent, and employment 3 percent, over the next 12 months.

Among Asian firms that list difficulty hiring as a top four concern, 65 percent indicate that they have increased wages to attract and retain workers, 45 percent are targeting new groups of workers (such as retirees), 39 percent have increased HR budgets, and 34 percent have increased vacation and flex hours. Asian companies adversely affected by trade wars will grow capital spending more slowly and reduce their number of employees.

Overall Latin American optimism is 56 this quarter, on a scale of 0 to 100. The Optimism Index is 70 in Mexico, 64 in Chile, 62 in Peru, 52 in Brazil, and only 37 in Ecuador. Economic uncertainty is the top concern among Latin American CFOs, with 65 percent of firms listing it as a top-four concern. Other concerns include government policies, currency risk, and weak demand.

Capital spending is expected to grow 1.4 percent and employment 2.6 percent over the next year. Among Latin American firms that have been adversely affected by trade wars with the U.S., employment is expected to increase 0.8 percent over the next year.

Compared to other regions, few Latin American companies indicate that they are taking specific steps to attract and retain workers, with 43 percent saying they have not adopted any new strategies. Twenty-nine percent indicate that they have increased wages to attract employees. Nearly two-thirds of firms in Peru say that recent judicial corruption cases will lead their firms to slow down and/or reduce investment.

Business optimism in South Africa fell to 38 this quarter, down from 51 last quarter. Nigerian optimism fell to 48 from 54. Employment should fall about one percent in South Africa and increase about one percent in Nigeria over the next 12 months. Median capital spending will remain flat in South Africa, and increase nearly 10 percent in Nigeria.  

African CFOs are most concerned about governmental policies, economic uncertainty, weak demand, currency risk, and access to capital. Among African firms adversely affected by trade wars, employment is expected to fall by 5 percent. Forty-one percent of African firms have increased wages to attract and retain workers.

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Detailed results, including tabular summaries of the numbers in this release and results from previous surveys, are available at

About the survey: This is the 90th consecutive quarter the Duke University/CFO Global Business Outlook survey has been conducted. The survey concluded September 7, and generated responses from more than 800 CFOs, including nearly 260 from North America, 65 from Asia, 128 from Europe, 352 from Latin America and 41 from Africa. The survey of European CFOs was conducted jointly with TiasNimbas in the Netherlands (, the France CFO society, and at GEM. The survey of Latin America was conducted jointly with Fundação Getúlio Vargas (FGV) in Brazil ( and with Universidad Andina Simon Bolivar in Ecuador. The Japanese survey was conducted jointly with Kobe University ( and Tokyo Institute of Technology, among others. The African survey was conducted jointly with SAICA ( ).

The Duke University/CFO Global Business Outlook survey polls a wide range of companies (public and private, small and large, many industries, etc.), with the distribution of responding firm characteristics presented in online tables. The responses are representative of the population of CFOs are surveyed. Among the industries represented in the survey are retail/wholesale, mining/construction, manufacturing, transportation/energy, communications/media, technology, service/consulting and banking/finance/insurance. The average growth rates are weighted by revenues or number of employees. For example, one $5 billion company affects an average as much as 10 $500-million firms would. Revenue-weighted mean growth rates are provided for earnings, revenues, capital spending, technology spending and prices of products. Employee-weighted mean growth rates are used for health care costs, productivity, number of employees and outsourced employment. The earnings, dividends, share repurchases and cash on balance sheet are for public companies only. Unless noted, all other numbers are for all companies, including private companies.

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