Business is conducted at increasingly faster speeds and creating a new degree of complexity that demands agility, accuracy, and insight from finance departments to keep up.
2016 has been a year of volatile markets and ambiguous economic data making it anyone's guess where monetary policy is headed. This economic malaise has pushed the subject of talent management to the top of executive priority lists. What is clear is the ability to attract, develop, and retain the necessary talent to fuel growing companies will continue to be a greater and greater priority, but also more difficult to achieve for two reasons that we highlight in this post:
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The combination of skills required to be in the “top-tier” are expanding
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Employee tenure is shrinking
The role of the CFO has evolved. CFO’s are now tasked with more of the company-wide strategic decision making and the level of insight required to make these decisions effectively involves partnering with all the business units of the company. The ability to consolidate and create a single source of truth from increasing amounts of data requires exceptional analytical skills, but in order to accumulate this data, professionals need to know when and where it originates, who is involved in the process, and how to acquire it reliably. To do this, finance must adopt a broader scope incorporating sales, HR, financial, and operational data into trusted and actionable analysis. Additionally, the analysis must be built so that it can be easily presented and understood by the wider audience.
Moreover, the end-to-end corporate reporting cycle is short and the stakes are high. Just ask ServiceNow (NYSE: NOW) about a mistake they recently made and how the market reacted, Oops! Forecasting Error Hammers ServiceNow as Shares Fall 20 Percent. Examples such as these, illustrate that successful finance department’s work depends as much on an employee’s interpersonal, collaborative, and other transferable skills as it does on the more traditional technical skills of finance and accounting. If you need proof, Adaptive Insights asked 533 CFOs in a recent survey what they believe to be the most important skills for successful and productive finance teams.** 75% answered “interpersonal/communication” skills and 70% responded “collaboration”. These were the 2nd and 3rd most cited answers right behind Excel skills.
A second undeniable and likely unstoppable trend is shorter job tenure which ultimately leads to significantly higher turnover rates than the 15% “organic” turnover typically modeled. Employee churn is expensive; there are the obvious financial losses (ie recruiting, HR onboarding, and training), but also significant losses to non-financial investments such as knowledge, culture, and competitiveness. “Stability” and “security”, or a feeling lack thereof regardless of management’s all too often reassuring rhetoric, are immeasurable factors that may be the costliest of them all. Both employee culture and retention are at risk as additional stressors are introduced into the workplace that compound as they manifest into tensions within relationships and teams.
The cultural and socio-economic dynamics driving shortened tenures are complex and outside the scope of this post, but two phenomena resulting from these dynamics are, while obvious, worth noting when discussing current hiring trends. 1) Employees are no longer retiring after 25 years with the same company with the proverbial “gold watch.” 2) Gen Y is averaging a tenure of 2 years in large part because they jump ship for “the next best thing” and have very little employer loyalty. The professionals of Gen Y are estimated to have over 15 different jobs in their career.***
Financials OnTap was created as a solution to the countless factors and trends taking place in society that are making it increasingly difficult to “attract, develop, and To a large extent, regardless of what an employer does or how well a company performs, employees will still leave. Google is an excellent example, where the average tenure at Google is currently 1.1 years**** and their employee perks are legendary. Regardless of first class incentives offered by innovative companies, employees exit, often, leaving many employers in the lurch and forced to rely on disappointing and overpriced temporary alternatives such as temp agencies or traditional consulting firms. Often full-time hiring is the result of unforeseen capacity constraints which forces the company to rush the hiring process and setting up yet another early departure.
Higher turnover and attrition will be the new normal. Our solution allows CFOs and founders to tap into highly experienced and educated experts who work on a project basis as independent consultants. Thanks in part to technology, we are providing the same caliber of talent but at speeds that allow you to scale rapidly and react accordingly to the ebb and flow of corporate finance.
1 Recode. Arik Hesseldahl, 28 Jan. 2016. Web. 24 Feb. 2016.
2"Global Survey Reveals CFOs Value "Soft Skills" and Collaboration." Global Survey Reveals CFOs Value "Soft Skills" and Collaboration. Adaptive Insights, 1 Feb. 2016. Web. 24 Feb. 2016.
3"Why Are Google Employees So Disloyal?" BloombergView.com. Bloomberg, 29 July 2013. Web. 24 Feb. 2016.
4 "Job Hopping Is the 'New Normal' for Millennials: Three Ways to Prevent a Human Resource Nightmare." Forbes. Forbes Magazine, n.d. Web. 24 Feb. 2016.
