Over the past decade, the role of the chief financial officer (CFO) has expanded beyond regulatory compliance and financial recordkeeping to encompass strategic leadership and digital transformation. Now, finance leaders are also playing a bigger part in helping to attract, develop and retain talent right across the business – and not only within the finance function.
This marks a break from the past, where the CFO’s main interest in talent and human resources came down to its impact on the bottom line. Several factors have converged over the past five years to highlight just how much value CFOs have to add to their business’s strategy for the future of work. The first of these is, of course, the COVID-19 crisis.
The pandemic highlighted the central role of people in creating organisational value, inspiring more interest among CFOs in how people metrics shape the business’s top and bottom line. Moreover, a shift towards flexible work showed how remote or hybrid working arrangements could introduce new information security and compliance concerns, productivity and cost-saving opportunities into the business.
The pandemic also accelerated a key trend that was in play before 2020: the growing prominence of environment, social and governance (ESG) on the business agenda. With many organisations measuring and reporting on diversity, equality and inclusion (DEI) in more detail, the CFO plays a critical role as the business’s recordkeeper.
Here are five trends we are seeing unfold as CFOs take a bigger role in nurturing talent and shaping the future of work in their businesses:
- Planning the talent pipeline
Labour is the number one expense for most organisations, so talent is a top concern for CFOs. But far from looking at people only as an expense in the income statement, forward-looking CFOs are starting to consider how they can help the business plan and budget for a talent pipeline that will enable it to be more competitive and productive. It’s not just about the cost – it’s also about how to drive engagement and development that will help the workforce create the most value.
- Mobilising talent
CFOs are increasingly collaborating with HR directors to create talent pathways that maximise opportunities for people while optimising productivity and the use of human resources. HR and finance can work hand-in-glove to develop business skills across the business and match talent to the needs of the future of work. As automation accelerates, this partnership plays an important role in quantifying the return on investment of talent, training and reskilling programmes.
- Providing insight and visibility
As we move towards a world of more flexible work, measuring cost and performance has become more complex for CFOs, HR directors and lines of business alike. Keeping track of the expenses of hybrid and remote work is tricky enough, but increasing the use of contractors and freelancers complicates matters further. CFOs are working closely with the business to create metrics for understanding variable labour costs and ROI to enable robust planning and forecasting.
- Mitigating risks
Flexible work can introduce significant risks to an organisation, whether it’s the information privacy complications of people working from home, or the tax and regulation nuances of managing people who work as contractors or consultants. CFOs are helping to navigate these challenges while addressing the business’s requirements and workers’ aspirations.
- Cultural change agents
Finance departments are setting the gold standard for employee engagement and nurturing talent in the business. Moving ahead, the finance function can also serve as a pipeline for talent for the rest of the business. Part of that could be driving cross-functional pollination by seconding finance people to other parts of the business to help create links between finance and other functions.