The EY Ireland CFO Survey 2023 has found that CFOs are playing an increasingly strategic role in their organisations. The role of the CFO has expanded as has that of the finance function which has evolved to become much more engaged with other areas of the business. This has brought with it a requirement for new skills as well as an increased focus on talent management.
That need is reflected in the survey results with developing future leaders, people management and talent retention continuing to be a key area of focus for the next two years for 60% of respondents. Reducing costs and compliance with sustainability regulations are also high on the agenda for most CFOs.
While technology in the form of automation and advanced data analytics capabilities will undoubtedly be critically important in supporting the evolving role of the finance function, talent must remain a key area of focus if it is to fulfil its potential. Indeed, 40% of the respondents said their priority for driving growth in the coming year is investing in upskilling existing talent in their organisations, while a further 34% said investing in new talent would be a priority.
It is clear that CFOs are focused on optimising the skillsets and talent they already have. This is particularly important in a very tight talent market where organisations of all sizes are experiencing significant levels of talent churn. That, in turn, leads to a loss of knowledge and skills which are not easily replaced.
On a continuous learning curve
A culture of continuous learning that empowers employees to work at their best and realise their potential is a proven talent retention strategy. Not only does it deliver increased job satisfaction, but it also opens up new career opportunities within the organisation.
However, organisations must also seek to automate the dull repetitive tasks that have traditionally been undertaken by the finance function. Some of those tasks can also be shared with other areas of the organisation such as treasury. Closer interaction between the treasury and finance functions can allow certain tasks to be shared allowing finance professionals to focus on more value-added work.
That work includes preparation for upcoming regulation and reporting requirements in areas such as sustainability.
Finance leaders may also need to look at hybrid models to access the capability required to meet the finance function’s expanded role. One option is to fill capability gaps by co-sourcing the required skillsets through professional services partners. These organisations can offer a range of services from basic accounting activities, record to report activities, control monitoring and testing, through to day-to-day treasury operations typically on a managed service basis.
Need to invest in diverse talent
At a higher level, the changing nature of finance reporting requires CFOs to master a diversity of skills, especially a deep understanding of non-financial factors. It is also leading to profound changes in the composition of finance teams.
The finance team of the future will be very different to those of today. Finance professionals will, of course, be at their core, but they will also draw upon a diverse talent pool to enable the function to play its full role as a strategic partner in the overall business and to embrace the potential of technology and data.
The future finance teams will augment the traditional skills of finance professions with those of environmental, social and governance (ESG), and have data analysts, supply chain experts, and process engineers. Having that wider expertise within the team will make it much more effective when it comes to creating greater efficiencies across the business and delivering long-term value to the organisation. Continued investment in diverse talent will, therefore, be imperative given the evolving and increasingly business critical role of the finance function.
Future fit CFOs need to focus on:
- Rethinking current operating models and mapping future touch points with other parts of the business such as the treasury and ESG teams
- Talent management strategies aimed at upskilling existing employees and attracting and retaining new recruits
- Acquiring the diverse skills that will make the finance function fit for its increasingly strategic role in the organisation
- Leveraging existing capability within other departments to support the finance function
- Outsourcing or co-sourcing elements of the finance function to external partners on a managed service basis, and stem employee turnover by ensuring that processes are future ready and efficient enough to retain talent interest and engagement.