While the labor shortage crisis has eased recently, CFOs continue to face pressure to build and maintain their finance teams due to their unique characteristics. Our second biennial CFO survey, Equipping The Strategic Mind of The CFO: The Role of Talent Recruitment and Retention, revealed talent as a high priority challenge, second only to macroeconomic inflationary pressures. Even though inflation has softened recently, we anticipate talent to remain an ongoing challenge for CFOs, preventing them from fully serving their organizational goals.
The top four challenges cited by the CFOs who responded to our 2022 survey include: Competing with other companies for the same high-skilled talent, revamping recruiting processes to provide more flexibility in job requirements and allow for remote work, managing budgets in the face of rapidly escalating labor costs and other operating expenses, and addressing low employee morale.
Evaluating the top challenges faced by CFOs
Six out of 10 CFOs in our survey shared that they struggle to attract and recruit resources, including challenges related to finding talent and providing competitive compensation. About the same percentage shared they were struggling with retaining talent within their finance teams.
However, there were a number of insights shared as to what was working to combat challenges. We identified four key trends with respect to talent.
Rising talent costs: The tighter labor market has led to increased competition and costs for talent, particularly those with unique skills. This necessitates extra resources for competitive salaries, and retention strategies amidst potential better offers coming from other organizations.
Changing employee values: Employee values have undergone a dramatic change in a post-pandemic world. The disruption of COVID-19 caused individuals to reevaluate their priorities and reassess their relationship with work. This means CFOs must take steps to make careers more interesting to their employees and future recruiting prospects.
Evolving work expectations: A shifting relationship with work has altered expectations about work arrangements, leading to a higher demand for work-from-home flexibility and adaptable working hours. CFOs must balance offering this flexibility with meeting the necessary demands of a finance function.
Automation of work: Automation through artificial intelligence or other digital tools would fundamentally change the staffing profile of finance functions. This integration will require strategic realignment of roles within a team. As CFOs are thinking through automation, team members may move away on to other organizations that offer higher pay and with advanced roles that better utilize their skills.
Addressing the retention problem is key
Across the board, the sentiment from CFOs is that traditional career paths no longer work and new strategies are required to manage teams. CFOs have been aware of the need to expand career development opportunities for a while, but making improvements became urgent in a post-pandemic climate. As we evaluate these challenges, we identified a few leading practices which can help make a material difference for CFOs and their teams.
Growing internal talent: CFOs should focus on growing leaders from their existing team rather than seeking more expensive external candidates who require training.
Cross-functional skill growth: CFOs can work with other departments within a company, such as technology, to offer a more comprehensive professional development path for potential new employees.
Crafting new opportunities for high performers: Traditional workplace models saw high performers be first in line for a promotion. Yet, now, innovative CFOs are making the effort to understand the full potential of all of their team members and adjusting roles to increase responsibilities and align with career aspirations.
Implementing rotational programs: Embracing programs which rotate staff through different departments within finance, as well as functions outside of finance, can offer employees new skill sets. Not only does this build a greater understanding of the organization as a whole, but it also expands relationships and skills sets for the employee and the company.