A health care worker administers a dose of Pfizer BioNTech Covid-19 to a student during a Vax To School campaign at a high school in the Staten Island neighborhood of New York, United States, on Tuesday, August 10, 2021 Vaccine.
Jeenah moon | Bloomberg | Getty Images
Companies from CVS Health to Tyson Foods to Walmart have issued vaccine mandates for workers, reflecting the fact that many C-suite executives still fear how further Covid outbreaks could affect business.
According to the CNBC Global CFO Council survey for the fourth quarter of 2021, chief financial officers see a Covid-19 outbreak as the largest external risk factor their companies face.
It’s the second straight quarter that Covid-19 has been identified as the top external risk factor by members of the CNBC Global CFO Council, who represent some of the largest public and private corporations in the world. The fourth quarter survey was conducted September 20-29 and included responses from 35 councilors.
In the first two quarters of 2021, CNBC Global CFO Council members identified cyberattacks and inflation as their top external risk factors. Those concerns came along with the payment of a $ 5 million ransom to Colonial Pipeline after cybercriminals hacked its IT network in June and the ongoing supply chain problems that seem to have impacted all industries.
Push for vaccine mandates
US President Joe Biden has focused on vaccine mandates amid the surge in the Delta variant. Last month, Biden effectively ordered vaccination of all federal employees and contractors, urging private employers with 100 or more workers to vaccinate or test their employees weekly.
That mandate would cover 100 million US workers and, according to the White House, would apply to about two-thirds of all US workers.
Many companies have taken Biden’s mandate, and many have told workers that if they don’t obey, they will be fired. The CNBC poll shows that a majority of US CFOs (80%) say they “totally support” the Biden government mandate, while less than a quarter say they totally oppose it.
IBM announced this week to US employees that they must be fully vaccinated by December 8th or face an unpaid ban.
“As a federal contractor, it is a business imperative for IBM to fulfill this mandate,” the company said in a memo sent to employees this week. “Given this requirement, the guidelines of many of our customers and partners, and easy access to vaccines across the country, we will now require all IBM US employees by the 8th IBM.”
American Airlines, Alaska Airlines and JetBlue Airways have all ordered vaccination of employees under Biden’s mandate, while United Airlines told its 67,000 U.S. employees in August that they would need to be vaccinated by the fall or face dismissal. The company announced last week that only 320 employees had not done so.
JetBlue employees “are required by the government to be fully vaccinated against COVID-19 in order to continue fulfilling their roles,” JetBlue CEO Robin Hayes and COO Joanna Geraghty said in an employee email.
Tyson Foods, with more than 120,000 employees in the United States, announced that it would issue a vaccination mandate in early August. The company said that more than 90% of its workforce has now been vaccinated, with that number having doubled in the past two months.
On Wednesday, the director of the U.S. Centers for Disease Control and Prevention Rochelle Walensky said cases and hospital admissions have declined on average across the country over the past week, but deaths, which are viewed as a delayed indicator stable at 1,400 per day. More than 700,000 Americans have died from the pandemic.
Concerns about the labor market, the supply chain
The pressure on vaccine mandates comes as companies of all sizes still have concerns about their ability to hire the workforce they need.
Forty-five percent of US CFOs surveyed said they are currently more concerned about irregularities in the job market than inflation or supply chain disruptions. This number has remained constant over the past two quarters.
The number of job vacancies is higher than that of the unemployed in the United States
For CFOs in other parts of the world, supply chain disruptions massively outweighed labor shortage concerns. Taken together, 40% of CFOs who responded to the survey said this was their top concern.
Supply chain issues have hit industries from booksellers to pumpkin fields. Securing the port of Los Angeles, the busiest cargo port in North America, has meant that container ships have had to wait an average of more than 10 days to unload cargo.
Companies like Nike and McCormick & Company recently stated that supply chain problems are hurting their businesses.
Matt Friend, Nike’s chief financial officer, said during its first quarter conference call last month that the company expects all of its business to be short term in the next few quarters.
“We have already lost 10 weeks of production time and this gap will continue … It will take several months to get back to full production,” Friend told analysts. About 80% of Nike’s shoe factories in South Vietnam are closed as the government tries to fight the spread of Covid-19, he said.
Over 80% of Asia-based CFOs who responded to the CNBC survey said Covid was the biggest external risk.
McCormick cut his full year forecast for adjusted earnings per share last week, citing supply chain challenges and pricing pressures.
“In all of our business, the supply chain is really our limiting factor right now. Demand for all of our products is extremely high, both from the consumer side and for our flavor solutions and systems business,” said McCormick & Company CEO Lawrence Das Kurzius in an interview to “Mad Money”.
“Transport and logistics problems, just getting the product from A to B, are our only limiting factor,” said Kurzius.