By Daniel Hunter
Finance executives at large companies are increasingly concerned about their ability to recruit, retain and develop talent in their finance organisations.
According to Deloitte’s Global Finance Talent survey, 39 per cent of finance executives state that today they are either 'barely able' or 'unable' to meet the demand for the talent required to run their organisations. A third (33 per cent) forecast the same problem in three years’ time.
The survey, which polled 312 chief financial officers (CFOs) and other executives in finance departments in large companies globally, also found that finance leaders are concerned about identifying their future replacement within their organisations, with many suggesting that the leadership pipeline is poor. Only 40 per cent of finance leaders reported finding highly skilled finance leaders internally in the last three years, with the problem particularly acute in Asia and Europe.
The concern over securing and developing talent reflects the evolving role of the modern finance organisation, in which executives are expected to be strategists and partner with leaders of other parts of the business to drive growth. The critical role of talent in this equation is reflected by the 34 per cent of respondents who state that talent management is now their top concern in their overall finance strategy. Of the remainder, almost all describe talent as “somewhat important” to their finance strategy.
“The requirements of the modern finance organisation have shifted. Finance should now serve as more than just a steward of a company’s resources and also help chart a path to growth in partnership with other parts of the business,” said Kay Forsythe, partner in Deloitte’s Finance Transformation team.
“Business leaders are looking to their finance organisation for a deeper, more hands-on, collaborative approach. While CFOs and other finance executives understand this, many of them lead finance organisations that simply weren’t built for that purpose.
“Finance organisations haven’t historically hired talent or built themselves to meet this demand for partnering with other areas of the company to drive growth. Consequently, there is a significant talent gap developing, which CFOs are now trying to address.”
The majority of finance executives (72 per cent) state that they have a strategy in place to recruit and develop the talent they need. However, according to the survey findings, in many cases talent development is not aligned with the future talent needs required in finance organisations.
For example, finance executives list the ability to communicate effectively with senior management as the number one requirement for career progression in the finance organisation. Additionally, the opportunity to learn and deploy this skill ranks only fifth in availability in finance organisations.
The main barriers to recruiting talent to finance organisations often come from the notion that finance cannot offer sufficient career development or rewards. Finance executives list the top three barriers to successful recruitment as the belief that there are insufficient opportunities for development and career advancement; that potential strong recruits continue to be lured by managerial or non-finance positions instead; and the fact that compensation and benefits are not competitive.
“The perception of a career in the finance organisation is out of step with the modern reality,” said Michael Haupt, director in Finance Analytics at Deloitte UK. “High priority roles in finance such as financial planning and analysis require an in-depth understanding of the business, strong relationships with peers across the company and many other capabilities not associated with the traditional finance skill set. This is one of the reasons why finance leaders are increasingly recruiting internally from departments like business strategy, operations and marketing analysis.
“Despite this, the outdated view of the finance function clearly remains given the problems recruiting and retaining talent. Finance is still seen by external recruits as a scorekeeper’s role, rather than a true partner in developing and executing business strategy. Finance executives, who only ranked the marketing of a career in finance eighth out of nine components for their talent strategy, should address this quickly.”
Additional findings from the Global Finance Talent Survey include:
- Financial planning and analysis skills in-demand. Thirty-eight per cent of finance executives list financial planning and analysis as an area where they have difficulty identifying qualified, high-potential talent, the most of any skill area. Internal control and audit (31 per cent) and tax (28 per cent) rank second and third.
- Partnering, strategic planning key today. Finance executives rank communicating with senior management; partnering with business units; participation in strategic planning; leading special projects; and leading/participating in financial systems implementation as the top five essential experiences needed for career progression in finance today.
- Increase in internal recruitment channels. There has been a sharp increase in recruiting finance talent via internal job boards, demonstrating the wider net finance executives are casting internally. Nearly half (47 per cent) of finance executives state they are now recruiting via this method, an increase from 31 per cent in 2007.
- Increase in external recruitment channels. There has also been an increase in recruiting finance talent via a range of external tactics. The use of search firms has increased from 45 per cent in 2007 to 51 per cent today, while campus recruiting has increased to 34 per cent from 27 per cent in 2007. Nearly one-third (32 per cent) of finance executives state that they use online job boards and social media for recruitment.
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