Upskilling and retention: why staff are at the heart of a successful growth strategy

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2021 marked a record year for M&A activity, with more than $5 trillion changing hands globally. The future looks very healthy for M&A activity in 2022 – positive news for business leaders who are looking to make bold decisions, realign capital and reshape the direction of their organisations.

However, research commissioned by BlackLine suggests that M&A and other growth strategies must be underpinned by the right approach to talent acquisition, upskilling and retention. Particularly in the finance function, which plays a critical role in ensuring that key stakeholders understand how the business and its combined entities are performing in real time.

BlackLine’s Generation Future Finance research included a survey of over a thousand C-suite executives and finance professionals in six markets. Results show that over the next 12 months, the C-suite’s focus will be on international, acquisitive or organic business growth. In fact, when it comes to the actions companies will take to recover from the pandemic, around a third (32 per cent) of C-suite respondents said they are planning to focus more on international markets for growth and acquisitions. A similar number (31 per cent) plan to be more aggressive when it comes to acquisitive growth, while more than a quarter (27 per cent) said the same about organic growth.

Many are also cognizant of the fact that they need to invest heavily in talent throughout the business in order to achieve these strategic goals. Nearly a quarter of C-suite respondents (24 per cent) plan to invest heavily in developing existing talent within the company, and a similar number (23 per cent) said they will invest heavily in talent acquisition at a leadership level. This suggests that the right people, with the right skills, will be an important foundation for future success.

Longer term, ensuring the balance sheet is robust enough to survive future financial downturns is the number one concern for business leaders globally. Digital transformation and new ways of working are also a concern – particularly among CEOs.

For CFOs however, talent acquisition is far higher on their list of priorities. While close to a third (32 per cent) said maintaining a robust balance sheet was their most pressing business concern for the next five years, almost the same number said the same of acquiring new talent (30 per cent). In fact, more CFOs are worried about talent acquisition than they are about their company’s longer-term organic (28 per cent) or acquisitive (18 per cent) growth, adapting to hybrid working models (25 per cent), or meeting environmental, social, and governance (ESG) goals (6 per cent).

CFOs not confident in F&A’s current skillset

It’s positive to witness that the C-suite, and CFOs in particular, intend to invest heavily in talent. Afterall, if you invest in people with the right knowledge, ability, and potential, they will ultimately help the business to deliver on its strategic goals.

However, just 14 per cent of CFOs are confident they currently have the skills they need. When asked about the skills their finance function needs to support the wider business, C-suite executives and finance professionals highlighted leadership skills, strategic thinking and technology skills as key gaps that need to be addressed. This comes as more than a third (38 per cent) of overall respondents said that not everyone in their finance team has the broad business leadership knowledge or skills required today. A similar number (35 per cent) said that not everyone in their finance team has the skills to help with more strategic work (such as analysis and planning) and that as a whole, finance and accounting (F&A) is failing to keep up with other areas of the business in digital transformation (34 per cent).

In fact, digital transformation appears to be a broader business challenge. When asked about the skills their company needs to adapt and grow over the next five years, two out of five (40 per cent) C-suite respondents admitted they are worried their organisation does not have the skills to digitally transform as quickly as competitors.

The must-have finance skills of the future

It’s clear that business leaders are still grappling with the challenge of implementing digital transformation plans. For the finance function, this is concerning given the C-suite’s current focus on acquisitive growth strategies – especially given the number of M&A-related challenges that arise when the parties to a transaction have manual finance and accounting practices.

For the finance function, finding people with both the right technology and F&A skills seems to be at the heart of the issue. More than a quarter (27 per cent) of global respondents said they do not currently have enough people with software and technology experience within the finance function – this rose to nearly a third (31 per cent) amongst CFOs.

Furthermore, when asked what the biggest challenge is for recruiting future F&A talent, more than a third (36 per cent) of overall respondents said it is difficult to find new candidates with both technology and F&A skills.

What F&A can do to address the skills gap

So what can organisations to do overcome these challenges and ensure the finance function has the technology and other skills needed to support broader business strategies? BlackLine’s results suggest that one of the first steps F&A needs to take is to free up time so that these skills can be developed from within.

There is a clear opportunity for businesses to play a larger and more proactive role in supporting their existing employees to develop the skills they need for the future. However, when respondents were asked about the biggest negative impact on employee retention for the finance function at their organisation, the top three issues were:

• There aren’t opportunities to learn new skills because transactional work takes up so much time (28 per cent)
• People don’t have time to focus on future career development (26 per cent)
• People become bored of the mundane, repetitive nature of the job (26 per cent)

This suggests that not only is repetitive, manual work making existing roles unattractive for good candidates, it’s also limiting business-critical opportunities for development.

C-suites know they need to invest in talent if they want to execute on their growth strategies and remain competitive. Yet many within F&A say there is simply no time for career development because transactional work takes up so much of it. Eliminating transactional, mundane work through automation to free up time for development should be a key step in building the talent pipeline you need for future business success.

Originally published on Business Reporter