Management
| Finance in global talent crisis |
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| Written by Adrie van der Luijt | |
| Tuesday, 11 September 2007 | |
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New research from business advisory firm Deloitte reveals a deep gulf between where the finance department needs go and the talent it has to get it there. The corporate world is wrestling with the constant and costly battle to find, recruit and retain talented individuals. The talent crisis is hitting whole organisations and finance functions have not gone unscathed. A worldwide survey of senior financial executives, conducted by Deloitte with the Economist Intelligence Unit - The Finance Talent Challenge - found efforts to attract, keep and develop high performers is not a chief priority. Indeed one of the biggest challenges is that only one third of CFOs surveyed say they have a recruitment strategy for finance at all. People are often an organisation’s greatest asset. Yet without talent programs many finance departments will risk weakening the business’ position. Finance already faces a drought of high-potential individuals. Over a third of CFOs (37 per cent) feel the finance department is barely able to meet its current demand for skilled professionals. Marcus Boyle, head of finance consulting practice at Deloitte, said: “The accounting troubles in 2002 marked the sector and resulting regulations upped if not doubled CFO accountabilities. Organisation’s relentless pursuit of ambitious objectives has led finance to temporarily take its eye off the ‘talent ball’, the impact of which is now playing out. Demand for high performers in finance is outstripping of supply and few companies are doing what it takes to lure top talent.” Financial Planning and Analysis (FP&A) professionals are highly sought-after finance professionals. They interpret financial data on the performance of the business to help project what is round the corner for the firm. Using intelligence on the health of the business helps to fuel critical decision making processes. According to Boyle: “When companies need help with their finance function we often start by looking at the FP&A Group. The quality of the people and the level of respect that they have from the business can tell you volumes about the health of a finance function. “If finance is going to help the business make the right strategic choices, it can’t be done without data to back up the recommendations. The FP&A individuals are typically where future finance leaders will be found, but these are amongst the hardest people to find.” Although 43 per cent of CFOs say they have career development programs to harness and further the skills of the high performers, a lack of career development tops the list of reasons talented people leave finance (48 per cent) functions. Sabri Challah, head of human capital consulting at Deloitte, reinforces the development issue: “Organisations must focus on what employees care about most. Stretching capabilities, providing roles that engage their heads and hearts, as well as helping them to achieve their professional goals.” Boyle adds: “CFOs must personally own the challenge of developing people at all levels. Some CFOs take an active interest others simply delegate it. You can guess which has the better talent in finance. Real people programmes must be created to take finance people all the way through their career.” Another stumbling block is the lack of opportunities. Strong CFOs need deep technical finance skills and strong business knowledge which is often gained from working in other business departments. Yet according to CFOs, 38 per cent of finance departments are reluctant to release individuals to other company departments. CFOs also recognise the need to tap the graduate ‘talent pool’. Although 52 per cent of CFOs surveyed claim current internships contribute to attracting high-potential students, 35 per cent of CFOs believe graduates do not see the finance function as a career launcher to begin with, presenting some bigger challenges about boosting finance’s appeal as a profession of choice. Boyle added: “Economic factors such as the ageing workforce means talent management was once a ‘good to do,’ today it’s a ‘vital need’ and driving competitive advantage through people is key. CFOs must lead the charge to re-brand the finance function as a career with great potential for growth and advancement.” The talent trouble is truly global. 67 per cent of respondents from Asia-Pacific claim the current supply of finance talent is either limited or inadequate. Further support of this view comes from 54 per cent of CFOs from Eastern Europe; 53 per cent from Asia-Pacific; 52 per cent from Western Europe; and 47 per cent from North America. Talent problems permeate industries. Nearly 80 per cent of CFOs in the Public Sector cited an inadequate or limited supply of finance talent, with Life Sciences and Healthcare at 65 per cent and Consumer Business at 67 per cent compared to 58.7 per cent of total respondents. Nearly 60 per cent of Life Sciences and Healthcare respondents expect the supply of talent to continue to be inadequate or limited in three to five years. The changing role of the CFO is a huge factor in the talent crisis. The focus of finance has shifted from traditional accounting and reporting towards strategy and leadership. This is intensifying the need for top talent and adding pressure to a breathtaking range of issues CFOs must address. The new role of the CFO and finance function can best be understood by looking at them as 'Four Faces.' The Four Faces are the roles that CFOs play and can be defined as:
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