How companies are redefining the role of chief financial officer
This article was written for our sponsor, Vaco.
The COVID-19 pandemic has upended lives, disrupted economies and transformed how businesses work. Companies have had to reshape themselves and their hiring to survive.
One role that has required redefinition is that of the chief financial officer, who must be more flexible, said Josh Haymond, managing partner of management consulting company Vaco’s Triangle practice.
“A lot of the underpinnings of what you need the CFO to accomplish are the same, but the steps to get there have changed. Looking at the pandemic and where we are, it’s not that it’s a different breed of talent,” he said. “It’s not that the end goal, end charge and end mission are different. It’s the ability to think creatively and nimbly on how to manage, and how he or she works collaboratively within their network.”
One area where this has become especially prevalent is in hiring and retention. Over the past year, companies have had to adjust how they attract and keep talent, said Haymond. In his role with Vaco, he has advised CFOs to look at what positions it would make sense to outsource.
“That might mean that there’s more necessity for a nimble workforce on a consulting basis versus solely building out a direct-hire team,” said Haymond. “It can’t all be done full time by your team. There should be some flexibility to outsource things when it makes sense.”
“The CFO is building a team with what makes the most sense for what we can outsource in mind. There has to be some level of adaptability if the economy did go down a little bit,” he continued. “If there’s not a strong hiring market, it would help if there’s not a lot of downtime built into that direct-hire staff, and you may end up having to let a lot of people go if that happens.”
Additionally, with even more options available for current employees on the job hunt, companies must make a more concerted effort to take care of their employees in order to keep them around. That might mean more surveys, regular staff meetings, or an increase in perks.
“To me, more detrimental than what happens in the recession is overworking your talent and driving them into something else, because you did not listen when they were raising their hand for help,” said Haymond. “The CFO has not typically been the one asking people if they need more resources, but that’s now the question the CFO has to ask in their direct reports — always assessing the workload and the bandwidth.”
In addition to retention, the pandemic has also dramatically changed recruiting, said Jason Grooters, executive vice president and chief financial officer for New Republic Partners.
“The biggest thing I’ve seen is a shift in culture and workforce,” he said. “That, with lack of new employees in the workplace, has created a perfect storm in staffing. Money is a big part of it, but the other piece of it is flexibility. Historically, flex time and remote working were benefits, but now it’s a standard. You have to offer it, and if you don’t, you’re not really competitive.”
Remote work has also made it possible for workers to negotiate higher salaries from companies in areas with a greater cost of living, while the employee themselves still lives where costs are lower. Recruiting in this situation means that a company must pay higher salaries than in the past to attract and keep talent, said Grooters. They also must be creative when it comes to perks, ranging from internet stipends to gym memberships. Offering generous benefits can also have a positive impact on the overall workplace culture.
With a new company like New Republic Partners, created in November 2020 and launched publicly in February 2021, growth potential can be a great selling point, said Grooters.
Using technology effectively is another important shift, with CFOs needing to spend more than in the past on technological solutions.
“That cross between finance and tech organization, it’s never going to blend completely, but it is possible to blend some. Finance transformation is the concept of transforming finance to drive strategic value through tech, digital innovation, upscaling and new ways of working. Right now, the CFO’s organizational chart is being tasked with more transformational projects involving tech than ever before,” said Haymond. “If you have financial leaders who are not just great with business technology but are on the same page as a C-suite with how we’re trying to accomplish that integration and how that helps us achieve our business goals, they are that much more tied together — versus some points in the past when they may have been a bit at odds as to how to arrive at company goals.”
The changes that have taken place during the pandemic have led to more interaction among the chief financial officer, chief information officer, and chief technology officer, and the lines between the roles have broken down, said Grooters.
“Those departments probably work more closely, if not daily, together in terms of what technologies do we need, what are they going to cost, how long are they going to take to implement, what is our benefit of doing this?” he said. “That’s always happening, but it’s really more accelerated in this environment. You need more tech to do things remotely than ever before, and there’s more involvement and engagement than ever before.”
This article was written for our sponsor, Vaco.