It’s become significantly harder for companies to find qualified workers in the United States. That’s the consensus among nearly half of the top U.S. chief executives polled for a study by the Business Council in collaboration with the Conference Board. The results were released Thursday during a Business Council meeting in Naples, Florida.
More than 43% of the 76 respondents indicated having trouble finding workers, compared with only about one quarter of respondents in February of last year. And while engineers and technical workers were their main staffing concern last year, it’s a very different story now: CEOs say a vast array of jobs, from entry level positions to janitors to management talent, is in short supply.
More than three-quarters of executive respondents said education and workforce preparedness should now be top government policy priorities.
A shortage of talent is only one of many challenges CEOs expect to face in 2007. The survey showed a marked decline in CEOs’ profit expectations compared to the last survey in October. More than three-fourths expect slower profit growth this year amid moderate U.S. economic growth. Less than 20% predicted growth to remain steady, and only 1.3% expect faster growth.
Rising commodities prices, the softening housing market and higher interest rates continue to affect business conditions. In the Business Council survey, a majority of CEOs expect inflation of 2% to 2.9% over the next six months, and interest rates between 5% and 5.4% in February 2008. The Federal Reserve has kept its benchmark federal funds rate target at 5.25% since June of last year.
Still, the study showed some positive signs. Despite an expected slowdown in profitability, most of the CEOs surveyed plan to move forward with capital investment plans. Also, the number of respondents who expect business conditions to worsen in the next six months dropped from the last survey. More than 24% of respondents are predicting slower growth, compared to almost half in October.
The CEOs also weighed in on private equity, with nearly 70% saying it provides an "important market function," though they had mixed opinions about its value. More than a third said private equity creates long-term value, while 29% are neutral. The majority believes private equity and hedge funds carry a growing financial risk, that current returns are unsustainable and that firms are "left with excessive leverage." But there is no consensus that firms should be regulated.
The Business Council comprises 200 top U.S. chief executive officers from such global companies as General Electric and American Express.