July 20, 2010
Company CFOs, as guardians of corporate coffers, have been under severe pressure in this economic crisis, equally to maintain profitability and efficiently manage their own financial organization. Revenue enhancement, cost control and risk management is still job number one. But not far from that is the acquisition, nurturing and retention of those who really make it happen – the accounting staff within their organizations.
Often considered dull, green-shaded, number-crunchers residing deep within headquarters, accounting personnel in the CFO organization have really taken center stage today as companies navigate this financial crisis. Keeping track of where the money comes in, where it flows to and all the myriad of new regulations is just par for the course. Accountants today are rapidly asked to become business leaders, possessing soft skills, adept at communicating and influencing others, and getting engaged in high profile cross-functional teams.
The paradigm for accountants, and for the profession is quickly shifting. And this fast change in the environment prompted Grant Thornton’s Public Policy and External Affairs service line to dig deeper into the CFO psyche and see their thought process in attracting, training and retaining accountants.
And some of the results are quite surprising.
In interviewing 32 Chief Financial Officers all across the world and in the public and private companies, Grant Thornton found that talent management scored high on the CFO agenda – in three distinct ways – how they brought in talent from the outside; how they trained in-house personnel; and how they retained them for the long term.
We had the opportunity to discuss with Ms. Gina Kim, Director Public Policy and External Affairs at Grant Thornton, the findings of a very interesting and insightful recent study that uncovered how CFO thought about, dealt with and managed accounting talent in their companies. Some outcomes were fairly counter-intuitive, but all results have serious implications on how the accounting profession should evolve to meet the requirements of their key clients.
First, bringing in talent. Conventional wisdom would indicate outsiders are needed to fill technical gaps existing in the company; and must possess detailed accounting knowledge and capacity to understand and apply complex regulations. But that does not seem to be the case. CFOs hiring external talent say the biggest challenge is there are not enough individuals in the market with necessary soft skills. Yes, these so called “personality or people skills” triumph over all other characteristics, a surprise even to Ms. Kim who did not expect such a result.
Alas, while accountants focus on the ‘hard” technical side in their resumes, employers are looking for leadership, intuition, and people management skills. Sadly, this is really far some solid accounting debits and credits. This has an important implication for CPAs looking to work in a corporation – emphasize the operational skills, show-up the leadership attributes and highlight the problem solving capabilities – since that is what the boss is looking for!
Another interesting finding – 50% of CFOs think that increased workload and number of hours has made corporate finance and accounting careers less attractive. No kidding – the hard work needed to become a top finance professionals is turning away folks today!
The study also looked at how CFO face the challenge of training accountants within their companies. And this is somewhat of a Catch 22. Consider this. Accountants have to deal with complex regulation – which are rapidly changing. So they need training. But they have no time to do so since they are doing the jobs of all the folks who are no longer there. Adding to this – training budgets have been drastically reduced. And CFOs feel that external classroom-based training really does not really help in real world situations. And while on-the-job training within the organization is the best way to inculcate soft skills and deep company knowledge, it is often not that easy to find suitable opportunities. So accountants and CFOs are somewhat stuck in the face of such challenges. Nonetheless, CFOs rated “enhancing critical thinking, problem solving and leadership skills level of their staff” the top factor in nurturing internal talent. So they are finding and need to find creative ways to train their subordinates.
Finally, the study looked at how CFOs plan to retain their current accounting staff. As Ms. Kim points out, in today’s dull job creation climate, finance folks are staying put. But CFOs fear rapid loss of personnel when the economy improves. And you would think that more money would help retain professionals. No, say the CFOs – surprisingly, compensation ranked fourth among factors leading to voluntary turnover. Number one turned out to be work/life balance followed by limited potential for advancement. Yes, accountants want to have a happy medium between slaving away in the office and spending time with their families. And also to advance up the corporate ladder.
Money is a motivator for sure, but CFOs feel that higher pay usually loses its power over the long run. So CFOs are finding ways to keep accounting talent really engaged in their current positions, by offering high-profile assignments with professionals from other departments, leadership opportunities and face time with senior management.
So what do CFOs need to do today to fully manage their in-house accounting talent? Ms. Kim provides three key recommendations. First, look for gaps on technical competencies and soft-skills across the spectrum, bring in external talent and train internal personnel to meet those gaps. Second, keep pushing for on-the-job training – a lower cost and more effective way to teach real-world skills. Third, provide opportunities for accountants to demonstrate their experience and gain new skills. Do provide equitable pay, but also recognize non-monetary factors can really motivate and retain employees.
The findings of this key study goes much beyond CFOs – it informs job candidates they need to acquire and showcase soft skills; it exhorts accounting professors to teach people management is as important as technical knowledge; and it pushes the accounting profession to create, nurture and develop accountants who are well-rounded strategic leaders bringing value to their organizations.