Report: Finance function crucial to success of a business
The training, development and retention of the finance function is crucial to the success of an organization, especially in the current economic climate, asserts a new report from the Association of Chartered Certified Accountants(ACCA)and KPMG called’Maximizing people power: Effective talent management in finance’.
The report emphasizes that securing the right talent is one of the biggest challenges faced by chief financial officers(CFOs).
“The next decade presents a critical opportunity for finance professionals to help create and sustain long term value for organizations,”Ian Lithgow, partner, KPMG said in the report.”But the challenge lies with employers to realize and leverage talent within their finance function.”
Brenda Lee Tang, head of corporate development for ACCA Caribbean added:”Last year we found that only 20 per cent of organizations had a talent strategy for their finance team. We found that most talent management strategies weren’t strategic at all, they were informal, sometimes run in isolation of other departments and not part of a wider integrated plan. This cannot continue.”
The report says that the responsibility lies with CFOs to establish and maintain great talent practices. Any plans they may have for restructuring the finance function must include a talent management plan that addresses the skills, capabilities and experience levels that are needed.
The report also suggests eight key components for CFOs that are facing this challenge:
•Define talent: Organizations need to identify what talent looks like, the key skills and behavior that finance professionals must have to deliver the organizational strategy.
•Identify recruitment and talent needs: Organizations should look at both the long-and short-term needs of the business and the finance function, recruit from within and without the function, and bring individuals into finance who have an established business or commercial understanding.
•Define the competencies needed: The next step is to consider what technical, business and behavioral competencies are needed.
•Target development: Some finance roles will be more critical to the organization than others. Junior roles can be as critical as more senior ones.
•Offer comprehensive learning: Leading organizations offer a comprehensive range of learning and development activities, which can be selected to suit the needs of the individual: Organizations are increasingly using finance academies to provide structured and consistent training.
•Structure career paths: Organizations must develop career paths for finance personnel that enable them to reach and aspire.
•Use performance management and reward: Align this to the overall organizational strategy, with rewards linked to individual achievements.
•Review regularly: The whole talent framework needs to be assessed on an ongoing basis to ensure it continues to meet the requirements of the wider organization and the finance function itself.
The report also says that there is an increased demand for the relatively new role of the finance business partner(FBP)–the highly commercial accountant who applies their core technical knowledge to business issues and provides the much-needed finance lens on organizational decision making.
Ian Lithgow concludes:”Finance business partnering is crucial to the whole business. It helps raise standards, takes a forward-looking approach and has a strong commercial view. However, the finance business partner needs to be free from the distractions of core finance work to offer this level of support.
“But the challenge for CFOs is to counter the effects of the recent economic slow down which has frustrated many talented management efforts. Now is the time to increase the focus on talent management. There will be a need to keep high-performing individuals motivated and committed. The astute CFO recognizes that the benefits of great talent practices extend beyond this, to succession planning, to cultivating the skills that finance professionals need to prove the performance of their organizations and drive long-term sustainable value.”
Brenda Lee Tang said talent management is broader than the individual.
“It is about managing aspirations and bringing a diverse range of talents together across the organization for the benefit of the business; it is about boosting the finance function’s credibility both internally and externally,”she said.”There are tremendous opportunities ahead of us, and our experience tells us that those organizations who put talent at the heart of their finance function gain competitive advantage.”