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The Greatest Staffing Challenge Facing CFOs

Robert Half's Paul McDonald shares his insights on moving to the cloud, the roles CFOs are having the most difficulty filling, and regulatory compliance trends from this year's Benchmarking Accounting and Finance Functions: 2019.

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This is the 10th year that Robert Half and the Financial Education & Research Foundation (FERF) have produced Benchmarking Accounting & Finance Functions to help financial leaders assess how their peers handle these critical functions.

FERF spoke with Paul McDonald, senior executive director for Robert Half, about how the report has changed over the last decade and where the profession is heading.

FERF: This marks the 10th iteration of the Robert Half/FERF Benchmarking report. How have you seen the report evolve over the last ten years?

Paul McDonald: It's been a very interesting decade for the accounting and finance functions and the professionals and business leaders that oversee those areas. Ten years ago, we were in the troves of financial crisis. When we went through the data, I had to go back and say, ‘Where were we in '09 economically? Where were we as the economy trickled down into the finance and accounting functions?’ We had been faced with a lot of compliance through the middle of the last decade, coming off the heels of the financial crisis. We had a lot of financial stimulus going on to help us through the economic downturn and everyone was watching headcount tremendously. We saw a lot of investment going on in technology, even with the ebbs and flow with workforce management through the economic downturns. 

Then, as we headed through '11, '12, and '13, we saw pickups in the demand for finance and accounting functions broad-based. We always saw a strong demand for compliance and internal control professionals to help them through the economic downturn. There was a steady increase to the point now where, this year, the unemployment rate in the United States is hovering around 3.8%, and low unemployment numbers in Canada, broad-based unemployment. It's really interesting to see how that pace has picked up tremendously.  

And, back to the technology piece, the pace of those investments has increased and the demand for different types of products in technology has increased. Pace of change, investment, everything in technology is really impacting the profession like I've never seen before. 

FERF: One major challenge for companies is the need for competitive employment packages to attract and retain talent. If this is being driven by millennials and gen z, what specifically are they looking for from their current and future employers?

McDonald: With the demand for talent and companies and industries doing so well on both sides, the demand for accounting finance talent and data analytical skills mixed in there, has never been greater. 

When you have a highly competitive market, companies have to do what they can to attract, engage, and retain. I think Gen Y and Gen Z started the conversation, but I see companies changing and picking up on the conversation from job-seekers to really meet in the middle. 

You hear that Gen Y and Gen Z are looking for socially responsible companies, meaning environmental and social causes. Those are all part of cultural fabrics within an organization. The companies realize that it’s an attractant, engager, and retention strategy. The bottom line is that companies really realize that this is good for the environment and the community. Gen Y and Z started the conversation, but I'm seeing the companies meet in the middle to agree with them and see that it is not just about attracting and retaining, it's the right thing to do.

They are making sure to have individuals who are talking about cultural aspects of the organization through social media channels, their website, and corporate citizens' reports that are being published by organizations. Human resource functions and all the other corporate leaders are talking about the cultural shift that includes good, corporate citizens and attributes. 

Companies are also asking, ‘If you join us, what's the advancement within your employment journey?’ They’re saying, ‘We meet with you more often than the other employers. We meet with you quarterly on a formal basis and monthly on an informal basis. Yes, we offer competitive benefits and a competitive salary, but we also are going to invest in you through training.’ That's one area right now that we're seeing: the upscale in training. ‘You may not have everything that is needed to perform the job today, but we're going to help you upscale to meet that gap.’

FERF: What are the roles CFOs are having the most difficulty filling?

McDonald: Well, it's always been a difficult fill, but I would say a three- to five-year individual with a finance and accounting background. It could be somebody with good industry experience from public accounting, and with strong data analytical skills. That might be the most prized individual. Then, add strong soft skills in the areas of critical thinking, communication, project management, and working well with teams. 

That individual has been in demand since I've been in the recruiting business… for 35 years. The added aspect here is the data analytical skills. 

FERF: Do you see those data analytic skills being emphasized in the programs at these schools that future employees are coming out of?

McDonald: No question. The college recruiters who are coming either from the Big Four, international firms, or industry are asking for those skills. It's not new. I'm a trustee at a university and I know that our Dean of the School of Business has been all over data analytics for the past five to six years. It’s table stakes. You have to have a strong program in that area or students won’t be prepared for employment and word will get out that it might not be the university of choice.

FERF: Financial executives are already feeling a lot of pressure around regulatory compliance and 59% expect their compliance burden to increase over the next 3 years. How are companies addressing this? 

McDonald: The compliance burden in the very early stages, let's go back a decade, could have been resting on the responsibility of the internal audit function or the finance and accounting leadership. Today, it’s a joint responsibility: the Chief Compliance Officer, the chief legal person, the CTO’s group, or the CFO’s group. I see this shared responsibility going on right now. I was taken aback by the results, but then looked at what they were forecasting as the increase in compliance. Worldwide compliance initiatives, lease accounting initiatives, and you still have SOX hanging out there. It depends on the industry. I see the investment in headcount for compliance professionals.

FERF: 58% of US companies are using cloud-based solutions in their accounting and finance functions. Does this number seem high or low to you?

McDonald: I think this is a great part of the report because I’ve heard many times from CFOs and financial leaders in the past, ‘We don't want to go to Cloud computing because we're afraid of data security. We're afraid of taking information outside of our servers, within our four walls.’ Well, infiltrations are happening daily, hourly, no matter if it's within your four walls or outside. I would always challenge that thought process. I'm really happy to see that number increasing. It is a nice movement because companies of all sizes now, not just the largest ones, have the ability to use products from third-party vendors outside their four walls to get things done more swiftly, efficiently, and timely. Cloud computing is the future and I expect that number to go up. It was nice to see the gains in that area based on the survey results. 

Ten years ago, everyone was either using Excel to reconcile accounts or doing it manually. Today, more and more sub ledgers are being moved to the cloud on both sides of the border. Canada had a steep drop in manual reconciliations. They saw 18 percentage points less. Not only are fewer general ledger accounts being reconciled, but there's less manual reconciliation, which shows the change in the technology is having an impact on the businesses.

FERF: Beyond the security, what are some of the reasons a company may hesitate or decide against adopting a cloud-based system?

McDonald: I would say that it was security in the early days, and I think that those fears have been, for the most part, minimized. The other thing is cost. A lot of organizations don't understand or haven't done the math to see what the return on investment could be for a good cloud-based computing product, either sub ledger or a general ledger. Once they do that, they realize the efficiency that it gained and the quick close that can happen, allowing their staff to do other things while that cloud-based computing product is being utilized. Companies’ of all sizes are seeing the benefit of moving to the cloud for many of their finance and accounting functions.