Growing assets: CFOs need to boost their team’s skills as finance roles evolve
Leadership and communication top survey in list of desired upgrades
With the roles that CFOs and senior finance professionals play within their companies expanding, it is more important than ever for businesses to recruit, develop and retain the best people for these positions. To look into the challenges businesses face in achieving these goals, recruitment firm Robert Walters recently surveyed over 580 CFOs in Hong Kong, the mainland and Taiwan.
The resulting report, “Using effective talent management strategies to excel the finance function”, found that 21 per cent of CFOs placed “identifying and developing future leaders” at the top of the list of talent management challenges their organisations may face in the coming year.
When asked what their direct reports would need to improve to reach the top, 38 per cent of CFOs said they would have to improve their leadership skills, 22 per cent cited communication skills and 17 per cent wanted to see an improvement in strategic planning abilities.
“Generally speaking, a CFO will want their senior finance manager to have the capabilities to lead a team,” says Andrew Blake, manager of the commerce finance division at Robert Walters Hong Kong. “Since finance is now expected to work much closer with the business and be able to drive revenue and profitability, communication skills are vital.”
While Blake believes junior staff need to build up their specialist technical competencies first, he also thinks that at some point in their careers it is very beneficial for finance professionals to gain exposure to various other operational functions.
“Companies like Tesco, General Electric and Dell offer finance management rotation schemes which get people into the operations of the company,” he says. “Jardine Matheson, Philip Morris International and British American Tobacco are examples of businesses renowned in the market for offering high-performers the opportunity to move across functions and be exposed to different areas.”
Blake sees a sense of hitting “the glass ceiling” as a common reason why finance professionals leave companies. “People will stay with an organisation if they feel that their careers are moving forward, they are getting the right exposure, they are receiving new challenges and their role isn’t becoming mundane.
“Pay is an important consideration, but recognition and the offer of opportunities for progression are other key factors. It is very important for an organisation to communicate with its employees about where their longer-term careers can go.”
Another finding was that 66 per cent of CFOs considered it “somewhat challenging” to recruit capable and effective Gen Y finance professionals, and 31 per cent said it was “very challenging”. Only 4 per cent found it “not challenging at all”.
Once Gen Yers are recruited, companies would be well advised to take on board how this cohort differs from their predecessors, Blake believes.
“The key difference with Gen Y is that we now live in an era of instant feedback and instant gratification, so they want to see more immediate results. There is more of a short-term focus on progression and on wanting their role to be interesting and satisfying from the start. In the past, people may have been more willing to bide their time and progress through the organisation to get to the more interesting and more challenging aspects.”
While compensation and career advancement are definitely significant, Blake says that he is hearing the importance of company culture expressed more and more.
“It can be difficult to articulate what exactly the company culture is, but I certainly think a company can help to generate their culture by increasing the sense of belonging. People need to feel happy in their environment, they need to feel like they enjoy coming to work, and they need to feel engaged and that they are part of the business.”
Overall, the survey found that 44 per cent of CFOs saw “driving top- and bottom-line growth” as the greatest challenge faced by their departments over the past five years. “Tightened business compliance and regulations” was selected by 37 per cent, while 33 per cent cited a “change in customers’ expectations”.
“Certainly finance professionals, and CFOs in particular, are expected to play a more central role in strategic planning and the operational side of the business,” Blake says.
He explains that while the fundamental backbone of the finance function will always be around areas like cost control, managing risks and maintaining liquidity, most corporations around the world – or certainly for-profit organisations – are ultimately driven by key stakeholders These include shareholders or the owners of the business, who want to see it increase in commercial value and yield greater profitability.
“So the finance function is being involved more in making decisions around the operations – whether this be reviewing processes to try and identify ways that they can become more efficient, at a lower cost, or evaluating investments to ensure they will yield commercial and operational synergies,” he says.