Contact: Katie Broome
Deloitte & Touche LLP
+44 020 7303 6359
The corporate world is wrestling with the constant and costly battle to find, recruit and retain talented individuals. The talent crisis is hitting whole organisations and finance functions have not gone unscathed. New research from business advisory firm Deloitte, reveals a deep gulf between where the finance department needs go and the talent it has to get it there.
A worldwide survey of senior financial executives, conducted by Deloitte with the Economist Intelligence Unit - ‘The Finance Talent Challenge,’ found efforts to attract, keep and develop high performers is not a chief priority. Indeed one of the biggest challenges is that only one third of CFOs surveyed say they have a recruitment strategy for finance at all.
People are often an organisation’s greatest asset. Yet without talent programs many finance departments will risk weakening the business’ position. Finance already faces a drought of high-potential individuals. Over a third of CFOs (37%) feel the finance department is barely able to meet its current demand for skilled professionals.
Marcus Boyle, head of finance consulting practice at Deloitte, said: “The accounting troubles in 2002 marked the sector and resulting regulations upped if not doubled CFO accountabilities. Organisation’s relentless pursuit of ambitious objectives has led finance to temporarily take its eye off the ‘talent ball.’ The impact of which is now playing out. Demand for high performers in finance is outstripping of supply and few companies are doing what it takes to lure top talent.”
Financial Planning and Analysis (FP&A) professionals are highly sought-after finance professionals. They interpret financial data on the performance of the business to help project what is round the corner for the firm. Using intelligence on the health of the business helps to fuel critical decision making processes.
According to Boyle: “When companies need help with their finance function we often start by looking at the FP&A Group. The quality of the people and the level of respect that they have from the business can tell you volumes about the health of a finance function.
“If finance is going to help the business make the right strategic choices, it can’t be done without data to back up the recommendations. The FP&A individuals are typically where future finance leaders will be found, but these are amongst the hardest people to find.”
Although 43% of CFOs say they have career development programs to harness and further the skills of the high performers, a lack of career development tops the list of reasons talented people leave finance (48%) functions.
Sabri Challah, head of human capital consulting at Deloitte, reinforces the development issue: “Organisations must focus on what employees care about most. Stretching capabilities, providing roles that engage their heads and hearts, as well as helping them to achieve their professional goals.”
Boyle adds: “CFOs must personally own the challenge of developing people at all levels. Some CFOs take an active interest others simply delegate it. You can guess which has the better talent in finance. Real people programmes must be created to take finance people all the way through their career.”
Another stumbling block is the lack of opportunities. Strong CFOs need deep technical finance skills and strong business knowledge which is often gained from working in other business departments. Yet according to CFOs, 38% of finance departments are reluctant to release individuals to other company departments.
CFOs also recognise the need to tap the graduate ‘talent pool’. Although 52% of CFOs surveyed claim current internships contribute to attracting high-potential students, 35% of CFOs believe graduates do not see the finance function as a career launcher to begin with, presenting some bigger challenges about boosting finance’s appeal as a profession of choice.
Boyle added: “Economic factors such as the ageing workforce means talent management was once a ‘good to do,’ today it’s a ‘vital need’ and driving competitive advantage through people is key. CFOs must lead the charge to re-brand the finance function as a career with great potential for growth and advancement.”
The talent trouble is truly global. 67% of respondents from Asia-Pacific claim the current supply of finance talent is either limited or inadequate. Further support of this view comes from 54% of CFOs from Eastern Europe; 53% from Asia-Pacific; 52% from Western Europe; and 47% from North America.
Talent problems permeate industries. Nearly 80% of CFOs in the Public Sector cited an inadequate or limited supply of finance talent, with Life Sciences and Healthcare at 65% and Consumer Business at 67% compared to 58.7% of total respondents. Nearly 60% of Life Sciences and Healthcare respondents expect the supply of talent to continue to be inadequate or limited in three to five years.
The changing role of the CFO is a huge factor in the talent crisis. The focus of finance has shifted from traditional accounting and reporting towards strategy and leadership. This is intensifying the need for top talent and adding pressure to a breathtaking range of issues CFOs must address.
The new role of the CFO and finance function can best be understood by looking at them as 'Four Faces.' The Four Faces are the roles that CFOs play and can be defined as: Steward: Protect and preserve the assets of the organisation; Operator: Balance costs and service levels to fulfil the Finance organisation's responsibilities; Strategist: Provide financial leadership in determining strategic business direction; and Catalyst: Stimulate behaviours across the organisation to achieve strategic and financial objectives.
The ‘Finance Talent Challenge’ report is a compilation of first-hand accounts from top CFOs and includes survey responses from 636 senior financial executives across a variety of industries. The study reflects insights on a range of issues, including the evolving role of the CFO, the future of the finance function and the challenges related to attracting and retaining talent.
A copy of the report can be found at www.deloitte.co.uk/financetalent
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About the report
Respondents came from various geographic areas, including 46 percent from Eastern and Western Europe, 31 percent from Asia-Pacific, Africa and the Middle East, and 23 percent from North and South America. Twenty-five percent were in the Financial Services industry, while 16 percent came from Manufacturing, 13 percent from Consumer Business, and 14 percent were from technology, media and telecommunications companies. Eleven percent of the respondents were within the Public Sector.
About Deloitte:
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms. Deloitte & Touche is the United Kingdom member firm of Deloitte Touche Tohmatsu ("DTT"), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other's acts or omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.
