The labor market is generally teeming with available talent, yet skilled finance and accounting employees are not necessarily any easier to find. Indeed, the accounting profession shed less than 2% of its jobs between September 2008 and September 2009, according to the Bureau of Labor Statistics, and CFOs who have recently hired say salary levels remain high. Perhaps more worrisome, Ajilon Finance recently surveyed more than 450 accountants and found that 23% plan to look for a new job when the economy improves.
That means that as corporate finance departments become leaner than ever, it's high time for finance executives to focus on winning the loyalty of their remaining staffers now and into the recovery, say experts. "At this stage, when most companies have had a restructuring or layoffs, you're going to find there are a lot of skeleton crews in corporate finance," says Jonathan Mazzocchi, general manager of the accounting and finance division at staffing firm Winter, Wyman & Co. "If you lose anyone [going forward], it will probably be a key player or [he or she] would be gone already."
And losing a finance staffer to a competitor means not only a business disruption but an economic hit, considering that staff-replacement costs are generally 120% to 130% of the salary of the person who leaves.
So what are some of the best ways to retain finance staff when budgets are tight? While it is tempting to look for cheap and quick gratification in the form of springing for the occasional pizza or offering spot rewards, many experts say the most effective retention tools don't need to cost anything at all — and could even save money. "The biggest driver of satisfaction is not free bagels, and not even your compensation, but providing more opportunities for people to do what they do best," says Chris Rice, CEO of human-resources consulting firm BlessingWhite.
When Rice's company surveyed some 7,500 employees around the world last year, including 270 U.S. finance employees, it found that perks didn't even make the top eight factors employees rated as key to their satisfaction. Instead, employees typically want more challenging work (and more say in how it's done), along with a good relationship with their manager. "You can be working for a company that's terrible in many regards, but if you have a great relationship with your manager, that could mitigate a lot of the problems," says Rice.
With that in mind, here are three ideas to consider as you seek to keep your best and brightest:
1. Reshape jobs. "It's very easy to retain employees by giving them more challenging responsibilities and upgrading their titles," says Mazzocchi, even if that means adding a layer of titles that didn't exist before, such as assistant manager positions. Another way to mix it up: introduce a rotational program for finance, and help get managers closer to operations.
This year Grant Barber, finance chief Hughes Satellite, rotated three of his direct reports into new roles within finance specifically for retention purposes. "I know they are being recruited," he says. "My goal is to have people look inside and say, 'When I compare my future inside Hughes with what I see outside, this looks much better.'"
Although there was some initial resistance from those who were comfortable in their roles, Barber was ultimately able to persuade them through one-on-one meetings. "I want them to have variety, growth, and flexibility," he says. "I didn't want to have to make the first move because somebody quit."
That type of flexibility can not only motivate employees but also pay dividends for the employer as businesses shift focus. The long-standing rotation program in finance at Actuant, a $1.66 billion (in annual revenue) diversified industrial company, has made staffers "generalists rather than specialists," says CFO Andrew Lampereur. That, he adds, has "really been a benefit in the downturn. As we've had to move people around even more, they're prepared for it; they're not like a deer in the headlights."
Another option: if you can't currently offer the salary increases that typically accompany promotions, promise to revisit the issue in six months, and possibly make raises retroactive if the company's financial situation improves.
2. Help employees reshape life outside work. Finance and accounting staffers at Life Time Fitness decided several years ago that their department's annual summer boat cruise on Lake Minnetonka, Minnesota, wasn't the most effective way to build group camaraderie. "It was nice, but we were looking for something with a little more meaning," says Ken Cooper, vice president of finance for the New York Stock Exchange–traded fitness-center operator, which is based in Chanhassen, Minnesota. As a result, the boat cruise was replaced with a four-and-a-half-hour bus ride to Wisconsin to clear trails for a day, something that about 75% of the 45-person department participated in the first time out. This past September, 60% of the group joined in.
Community service is becoming an increasingly common team-building exercise, says Jodi Chavez, senior vice president at Ajilon Professional Staffing. Many accounting firms now allow staffers a set number of work hours for volunteering, for example.
But not all team activities have to be service-focused. Life Time Fitness's Cooper and controller John Hugo started a six-month health program called "Fiscal Fitness" for all finance and accounting staff last April, modeled after the TV series "The Biggest Loser." With nearly 100% participation, each team had six months to make the most improvement in terms of weight, strength, and other fitness goals. Intermittent competitions, such as a bowling tournament or a run around the company campus, help teams assess where they stand.
The program has helped employees become more enthusiastic while also making it easier for them to reach their personal goals.
3. Allow more time off and flexible work schedules. Many employers, particularly accounting firms, are formally allowing flexible work schedules, such as those in which employees can take every 10th day off. But offering a few bonus vacation days ad hoc can also be appealing. "You might say to someone, 'You've been working hard — why don't you take the next two or three Fridays off?'" says Mazzocchi. This clearly won't work during crunch times, but with a little forethought a CFO could make this offer to any number of employees over the course of several months.
Another relatively inexpensive gift: you. Some employees would jump at the chance to have lunch or play golf with the CFO, say experts. "The more you can get people to feel like they have visibility at a high level," says Mazzocchi, "the more likely they are to stay."
Alix Stuart is a senior writer at CFO.