Chief financial officers (CFOs) globally are today paying a lot more attention to the skills and competencies of their finance hires. Yet data from recent North American surveys shows they face some big challenges:
• Sixty-four per cent of US finance executives believe that financial planning and analysis (FP&A) positions are the hardest to fill, according to the American Productivity and Quality Center (APQC), while 75% of finance executives say FP&A is not well aligned with business strategy.
• Software as a Service (SaaS) company Adaptive Insights (formerly Adaptive Planning) reports that 78% of CFOs cite talent and skills management as the factors making the biggest impact on their future role.
So why is it getting so hard to find the right people for the job? There are four basic reasons:
• The growing unpredictability of the business environment: The business landscape is changing faster than ever and is being disrupted by emerging technologies. Often it’s hard to tell what’s likely to come next. The traditional “siloed” finance function cannot provide that kind of insight and foresight. These new strategic challenges require a new type of finance executive.
• The expanding role of the profession and the growing need for soft skills: More and more FP&A executives are working in close partnership with business leadership and the C-suite. They need to have the right communication competencies; they can’t just “talk numbers.” They must tell stories, influence decisions and have the interpersonal skills required to build strong relationships with groups outside of finance.
• The advent of big data: As more diverse data becomes available in real time, FP&A professionals must have the skillset to interact with IT or data scientists and understand the underlying architecture of how data is stored and staged, so they can run it through predictive models and come up with advice to help leaders make good business decisions.
• The evolution of new technologies: Finally, while Excel will always have a place in financial planning and analysis, there’s a new crop of dedicated FP&A applications – many of them in the cloud – that automate low-value functions, create a direct pipeline to the business and offer the analytics capabilities FP&A needs. Today’s FP&A talent needs to be familiar and comfortable with more advanced technologies.
Six best practices for hiring FP&A talent
How can CFOs and senior FP&A executives ensure they hire talent to match these new requirements, and thus better align the FP&A team with the organisation’s strategic objectives? Here are six recommendations
1. Choose candidates who can demonstrate good Excel skills and the ability to analyse and build models: While new technologies abound, no one expects Excel to go away entirely. Many organisations still rely primarily on Excel to do FP&A work, so excellent skills remain a must. Managers can test that by giving candidates a data set, and ask them to develop a model to help solve a business problem.
2. Ask them to demonstrate technological savviness: Beyond Excel, new hires should demonstrate they are comfortable – or even already adept – at using more advanced planning and analytics tools. There may be a learning curve involved, but examples of past facility in acquiring new technology skills can help.
3. Seek an inquisitive mind: It’s important to find intellectually curious candidates. The evolving role of FP&A is that of being the “questioner” of the status quo. Executives will need to be able to ask the next question, look beyond the obvious and be excited about learning new things. That’s a lot more difficult to test. However, one way to gauge that tendency is by listening carefully. Is the candidate asking a lot of questions or only answering them?. Do they inquire about the environment and about the role and projects they’ll be involved in?
4. Look for motivation and persistency: Part of FP&A’s job is to effect change in the business and impact the direction of the organisation. Today’s idea might not go over very well, yet it may become a good solution in a month or six months. When looking for candidates, seek out ones who will be persistent at pushing for new ways of doing things. Ask them about their past experiences in finding solutions and advocating for change.
5. Search for those soft skills: FP&A is the voice of the CFO. It should also strive to become a trusted advisor to the business. When looking for new hires, it’s important to find candidates who have good interpersonal skills, communicate clearly and not in finance jargon. They need to be able to tell stories about numbers. One way to gauge that skill to ask candidates to create an engaging presentation based on a set of data. New hires also need to be diplomatic and have the ability to influence. Listen to the way they tell the story of their own past experiences and how they accomplished past projects.
6. Find candidates with a diverse background: Because FP&A is no longer focused on looking backwards or merely reporting numbers, hiring managers are advised to seek candidates who have had experience working at other departments and environments. Some examples include audit, marketing, business finance and operations. That same diversity of background applies to applicants’ academic background. While foundational finance skills are important, increasingly successful FP&A hires have a liberal arts education.
Finally, there are two more success factors that can help companies get the right talent for the job.
Firstly, surveys by The Hackett Group have found that companies that better at talent management have CFOs who typically exhibit two times greater engagement in the process, and CEOs who are four times higher in their level of involvement. So getting senior management involved in the hiring process and the staff development process can help pick the right candidate for the role.
Secondly, no one person can have the full range of skills to become an instantly successful FP&A executive. It’s therefore important to provide new hires with the right professional development opportunities. In many cases, that’s a combination of mentoring, internal training and rotational programs and external engagement with professional associations, or even formal training such as the AFP’s Certified Corporate FP&A Professional designation.
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