Talent is critical to the success of the finance function. In EY’s fourth global private equity CFO survey, 51% of private equity (PE) firms said they believe retaining talent is the top issue required to remain competitive in the future. A number of other surveys report similar findings in other industries. A Deloitte survey of 312 CFOs and other executives in finance departments saw 39% of respondents say they were either ‘barely able’ or ‘unable’ to meet the demand for talent to run their organization, while in the CFO Alliance’s 2016 CFO Sentiment Study, 70% of finance leaders said human capital is either of concern, or of great concern.
These CFOs are right to be worried, as talent is critical to the finance function. KPMG’s 2013 survey of senior finance executives found that 44% of all respondents and 61% of the high performers (those with revenue and EBITDA growth of more than 10% over the past three years) felt talent management to be the most important factor for the success of their function. Just 6% said they believe there are other factors that are more important.
We are in the midst of an evolving labor market, where millennials are now a dominant presence, bringing with them a new attitude - one focused on different priorities and little expectation of loyalty. In a survey by Deloitte, 44% of millennials said that they expect to leave their current employers in the next two years if given the choice. Later in this issue, Maria Maguire looks at the unique qualities millennials bring to the finance function, and what CFOs can do to entice them into a career in the field.
This change to the workforce is not limited to changing demographic, though. Automation and digitization are also rendering a number of roles redundant, with an estimated 47% of workers in the US’s jobs at high risk of potential automation. Laura Denham looks at the impact AI will have on the finance function later in this magazine.
Ultimately, we are now in a world where the idea of gainful employment is becoming an increasingly fluid concept. It is, therefore, vital that CFOs develop an effective talent strategy. This doesn’t simply mean gathering the finance team’s input in talent planning - it involves building a more comprehensive end-to-end strategy and understanding trends that could have an impact so they can take action to mitigate the effects. Also in this issue, we look at the major trends in the finance function this year, as well as articles on strategies for CFOs in hyper-growth companies, the resurgence in interest in zero-based budgeting, and selecting the right KPIs.