The way a company manages its talent management can often be a main driver for operational success. A recent study indicated that 85% of HR executives said that the single greatest challenge in workforce management is creating or maintaining their companies’ ability to compete for talent. In today’s work environment, effective talent management delivers one of the most acute points of strategic leverage.
Yet there is also a rapidly changing business environment that companies need to consider. The talent agenda in finance is also affected by three external influences across the finance workforce:
1. Changing Demographics
The mass retirement amongst Baby Boomers is one of the most worrying threat to skill sets in the labor force. According to the Bureau of Labor Statistics since the recession in 2007 the age group that continues to grow rapidly in the workforce is the over-55 crowd. Yet the under-30 set is shrinking.
The conflict between the increase of aging talent and the shrinking of the younger workforce needed to step into these roles means that F&A talent management has never been more important. Finance leaders and HR must take evaluate their disparate global teams to ensure that they don’t suffer a dearth of vitally important skills in areas such planning and analysis, tax and compliance.
2. The Cost of Training and Retaining
A recent study by PwC found that the average cost per finance FTE is on the rise, up from $86K in 2011-12 to $90K in 2012-13. Companies are investing in talent to meet the increasing need for experienced, skilled and creative finance professionals.
Companies must assess their true costs that go well beyond payroll, and factor in advertising and recruiting costs, new staff hiring costs, training costs, termination costs, and the cost of unfilled positions.
Globalization is now the new normal. Yet, it’s a double-edged sword. While the opportunity that exists is almost overwhelming in scope, the challenge of managing a global F&A workforce as well as the additional worry of increased regulations and compliance acts as a strong incentive for near-shore and offshore back office outsourcing.
The global workplace is increasingly more connected and more educated. More than ever before, it is not only practicable to have finance functions conducted where wages and benefit costs are much lower than in the United States, it has become a necessity. There is little doubt that as companies continue to expand their reach internationally, as well as strive to improve market share in a highly competitive global market, the lines between internal talent and outsourced talent will only increase.
Tomorrow’s Talent Landscape
As these three outside influences continue to impact the F&A departments of companies around the world, companies (both midsize and enterprise level) will need to view their F&A talent through a different kind of lens – one that factors in an outsourced model.
Organizations will have to evaluate FAO providers not only on cost, but also on criteria such as innovation, communication and collaboration, and the ability to make steady marginal gains and gain insights across silos.
If you are looking to get away from managing people and really improve your F&A function, why not arrange a free assessment of your current practices with one of our finance experts, schedule an appointment today.