Content We Love — More Companies Look Internally for Future Finance Chiefs
When employees are given the proper tools and outlet to add strategic value, companies reward their efforts. As well, as a business grows, institutional knowledge becomes increasingly valuable. Specifically, in the office of finance, as detailed in an article by The Wall Street Journal (WSJ), trends have shown that organizations are looking internally for their next finance chiefs. By doing so, the F&A function can elevate their strategic value-adding efforts with automation, as we’ll discuss in this blog.
Top Talent is Scarce
Beyond the technical details of financial transformation, the process of executive hiring is daunting. Even in a robust economy, the costs of hiring and training new employees will always exceed the costs and challenges of retention.1 When an organization is focused on strategic growth, retaining a leader that understands the business’ specific complexity can increase their competitive advantage. According to Jenna Fisher, the head of the corporate officer’s practice at executive recruitment firm Russell Reynolds Associates, “Companies now appreciate how hard it is to recruit great talent.” Nearly 75% of the Fortune 500 CFO searches she is involved in have at least one internal candidate, up from less than half three years previously.
Historically, the office of finance team has been seen as merely back-office number crunchers that, while necessary, are not particularly innovative. However, F&A employees are usually among some of the best-educated and well-trained members of an organization; they have an inherent focus on analytics and efficiency alike. With an experienced and technology-focused finance chief at the helm, the office of finance can have a cross-functional impact.
1. Build on Connections
One of the quickest realized benefits of an internal CFO promotion is their ability to hit the ground running. They do not need to be brought up to speed on internal procedures and can instead focus on elevating the finance function in their new role. According to Mark McGivney, CFO of professional services firm Marsh & McLennan Cos., “Internal promotions are seen as a risk-management tool, especially in the finance function. It’s risky going to the outside”
Instead of spending the initial few months learning about the inner workings of the organization, internal candidates are able to focus on improving the inefficiencies that they’ve already experienced. Due to the manual processing that is so common in the office of finance, this typically translates into transforming how the work is being performed. When the office of finance is mired in manual methods, they are often so focused on meeting deadlines that risk management and high-level analysis are left to the last minute, if completed at all. By implementing an automated solution for the financial close, mundane and repetitive tasks can be removed from accountants’ to-do lists.
2. Improve Cross-Functional Collaboration
For any department to grow, they must fit their needs within the broader budget—managed by the office of finance. When this budget, and other aspects of the financial close, is managed on manual spreadsheets, everything slows down. With an automated solution in place, the office of finance can contribute to the streamlined organization as value-added resources ensuring projects and analysis are on track. Even with tighter budgets ahead, F&A teams can prove their value and cut costs at the same time.
3. Increase Organizational Efficiency
Once F&A teams make the shift toward technological change, automation can bring greater usability to financial data gathered and analyzed throughout the reporting period. Increased efficiency is one of the easiest ways to improve upon an existing process. And no one has time to reinvent the wheel. For the office of finance to implement and expand the benefits of automation, they need an established leader. According to Gerry Laderman, the finance chief of United Airlines Holdings Inc, “You benefit from people already understanding the business moving up. It’s a little bit easier if you are already here.”
To learn more, click on the banner below to discover how automation can increase your company’s competitive edge and financial output.
To read the WSJ article in full, please click here.
Written by: Chelsea Downey
 N.A. (January 23, 2019). RECRUIT VS. RETAIN: The Real Cost of Hiring and Turnover. Retrieved January 15, 2020, Whitepapers Online.