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CFO Priority: finance talent development

If finance is going to keep its seat at the strategy table, it must provide sharp and meaningful analyses to business decision-makers. Smart CFOs are evolving their talent development programs to fit the bill.

Laurent Leloup
Laurent Leloup
Research Snapshot
APQC, in conjunction with EPM Channel, conducted a survey in the summer of 2012 to better understand trends in finance talent development (1). The overriding hypothesis: there is a coming war for finance talent. As baby boomers retire in droves, large organizations in particular will find themselves short of well-trained and properly polished finance professionals, the very people needed to provide analytical support to senior business decision-makers.

The top-level findings are as follows:
- There is a staggering gap between the potential value that the typical finance organization can deliver to its stakeholders and the value now being delivered.
- The gap exists because finance is bogged down in transactional work and doesn’t have the time needed to produce meaningful analysis.
- It is hard to add bandwidth because finance, in general, is not given the tools needed to increase productivity and free people from grunt work.
- The toughest vacant positions to fill are for financial planning and analysis.
- Finance people who are considered effective business partners tend to work for CFOs who have a strong commitment to professional training, including crucial soft skills such as persuasive presenting.

The survey drew responses from finance professionals at 119 organizations, mostl U.S./Canadian and European, and mostly mid- or large-sized.

Research Summary
Surprisingly, only five% of survey respondents believe that finance is currently delivering game-changing value to their enterprises (Figure 1). Is this cause for concern? It depends on how you look at it. On the one hand, three-quarters of the survey takers feel there’s a good deal of value being delivered now. However, the next data set (Figure 2) shows that almost everybody believes that they could do much better.

CFO Priority: finance talent development

CFO Priority: finance talent development

The biggest barrier preventing finance from having a game-changing impact is lack of time to perform value-adding analytical work (Figure 3). Arguably, the second and third largest barriers cited are at the root of the problem. These barriers are (a) a lack of enabling technology to make finance more productive and (b) no easy access to operating data to feed performance forecasts and models. Apparently, people feel that during the typical work week finance staffs devote themselves to basic stewardship and bookkeeping duties—important work that must be done and done well, but it’s work that tends to be labor-intensive and non-value-adding if processes are not properly designed and/or automated.

Surely, this is an age-old dilemma; it’s been cited on numerous occasions by thought leaders such as David Axson (2). But one could argue there’s tremendous urgency around this issue today.

CFO Priority: finance talent development

In previous years, the finance function sat mostly on its own and “crunched the numbers” without having much input into—or much appreciation for—long-term strategic aims. In the realm of risk management, finance tended to focus on financial risks, such as foreign exchange risk. However, the Great Recession, the on-going Euro-crisis, and gnawing uncertainty about fiscal and monetary policy, particularly in the U.S., have put organizations on alert to new kinds of risks and opportunities. At many companies, finance is playing a stronger role in analyzing those risks and opportunities and their potential impacts on enterprise performance. With 79% of survey respondents saying that finance is currently seen as a partner to the business, it’s clear that the role of finance has evolved (Figure 4). That’s the good news. But can finance hold on to its seat at the strategy table? Not without change.

CFO Priority: finance talent development

Given that the focus of this report is on finance talent, we are avoiding further comment about financial management technology and process management. Indeed, the talent story is compelling enough on its own. The 21% of respondents who report that their finance groups are not considered business partners (by their counterparts on the operations side) differ from “the partners” in that they are not given a seat at the decision-making table. Why are they being shunned? Interestingly, over 40% of the partners make it a point to invest in soft-skills training (3).

They also go out of their way to encourage finance employees to learn the business. Though both partnered and non-partnered organizations invested almost equally in encouraging finance employees to learn the business, only 16% of non-partnered finance organizations invested in soft-skills training (Figure 5). Also note that more than 30% of the nonpartnered organizations say they have made no investment whatsoever in developing and retaining finance talent. The consequences of that oversight are now becoming apparent.

CFO Priority: finance talent development

Taking a step back and looking at all respondents as one group, we see that 36% have made investments in soft-skills training during the past two years (Figure 6). That result is both surprising and refreshing. Surely, five years ago, a similar survey would have revealed a much smaller appetite for soft-skills training.

CFO Priority: finance talent development

What’s the take-away? By developing managerial skills not adequately addressed by a traditional accounting curriculum, CFOs are preparing the next generation of finance talent to take—and keep—their seats at the strategic planning table. Soft-skills training programs aim to strengthen finance staffers’ ability to communicate concisely with top executives, negotiate with managers in other domains, build effective teams, and collaborate with others in pursuit of common goals. Note, too, that the most common talent-development investment made in the past two years involved encouraging finance employees to learn the business. This is further proof that finance organizations, in general, hope to sharpen their partnering abilities and make a meaningful contribution to vital planning discussions.

At a response rate of 64%, financial planning and analysis (FP&A) is ranked as the biggest challenge when it comes to filling positions (Figure 7). FP&A is the area where soft skills are critically important. FP&A professionals are increasingly responsible for generating and presenting analyses that will persuade senior decision makers to select courses of action that will grow both revenue and profit and, at the same time, stay in alignment with strategic goals. Such high-value finance professionals are difficult to recruit, and finance organizations are struggling to fill these roles.

CFO Priority: finance talent development

Almost half of survey respondents plan to hire additional finance professionals from external sources in the next 12-18 months. What is troubling, though, is that 69 percent of the same respondents are finding it challenging to recruit finance talent from external sources with the capabilities needed to be effective (Figure 8).

CFO Priority: finance talent development

With such large challenges related to hiring finance talent from external sources, it is understandable why 66 percent of finance organizations say they prefer to promote from within before recruiting from outside sources. The challenge then becomes how to develop highquality finance professionals and keep them and their knowledge within the enterprise.

If finance development and retention programs do not concentrate on the areas important to up-and-coming staff, talent flight is inevitable. The key is to identify what finance people truly value and create training programs that address their needs.

What Matters the Most
The top three things finance professionals value the most are also the top reasons why talent leaves the enterprise. Expectedly, compensation—salary, bonus, health benefits, retirement package, etc.—tops the list. Career advancement and work/life balance are the second and third most highly valued aspects with 46 percent and 21 percent of respondents, respectively, listing them as the reasons for finance talent flight (Figure 9).

CFO Priority: finance talent development

Next generation finance professionals won’t be content closing the books. Fortunately, senior managers usually have more control over career development programs than they do over compensation decisions, which are usually either governed by HR or fixed according to past experience and rigid performance-assessment models.

When it comes to the issue of work/life balance, (5) best-practice organizations offer a range of helpful options, including:
- health and safety programs,
- work-at-home policies and practices,
- fitness benefits,
- support for dual-career families, and
- sabbaticals.(6)

When asked to describe their organizations’ talent development strategy, only eight percent reported having a mature and consistent approach. It’s alarming that 38 percent of respondents claimed having “no coherent strategy” and 52 percent, worryingly, reported having a “good, but not great” strategy for talent development. It’s clear that now is the time to move up the maturity curve. By developing strong finance development programs and integrating flexible work schedules, senior managers have the ability to ease two pain points: the risk of talent flight and difficulty of hiring from external sources.

A Final Word
Finance organizations that are seen as a partner to the business generate thoughtful, clear, and authoritative analyses. However, the biggest barrier preventing business partnership is the lack of time to perform this same work. What, at root, is the problem? There is no simple answer— the core issues are myriad, including:
- not putting the right people in the right jobs;
- not developing effective collaboration policies and mechanisms to support planning, forecasting, and reporting;
- not moving transaction-oriented work into well-run shared-services environments;
- forcing finance staff, again and again, to “do more with less”; and
- inadequate investments in talent development and retention programs.

The trouble begins with allowing operations managers to make resource-allocation decisions without consulting finance. This sets a cultural norm that implies that the voice of finance is not needed. As a result, finance often has trouble obtaining approval for investments in process streamlining and automation; these investments would increase staff productivity and free up more time for effective analysis. But in the end it becomes difficult to gain a consensus among operations managers (the P&L owners) about the virtue of raising the quality of analytics in finance. Alas, finance stays stuck doing grunt work. Surely, the automation of streamlined processes could free up more time and enable finance to meet the demands for analytical authority now coming its way. Greater effectiveness and staff productivity, however, must go hand-in-hand with developing and retaining strong, wellrounded people who understand the business.

APQC is a member-based nonprofit and one of the leading proponents of benchmarking and best practice business research. Working with more than 500 organizations worldwide in all industries, APQC focuses on providing organizations with the information they need to work smarter, faster, and with confidence. Every day we uncover the processes and practices that push organizations from good to great. Visit us at and learn how you can make best practices your practices.

(1) The focus was on financial management professionals working in large organizations across a wide range of sectors.
(2) (August 2012).
(3) In the survey questionnaire, hard-skills training was defined as statistical modeling, regulatory filings, etc. Soft-skills training was
defined as communication, presentation skills, etc.
(4) Compensation includes salary, bonus, health benefits, retirement package, etc. The perceived quality of management includes
direct manager, senior management, CFO, etc.
(5) For more information on work/life balance, see APQC’s case study: Retention and Work/Life Balance Programs at General Mills--April 2012 HCM Community Call.
(6) “Take a Comprehensive View of Work/Life Balance” APQC Knowledge Base, 2010.

Laurent Leloup

Jeudi 11 Octobre 2012