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How to build the finance function of the future

Simon Davidson Simon Davidson

The function of business finance is undergoing a transformation.

Traditional activities, such as transaction processing, ledger maintenance and statutory reporting, remain core to its remit, but increasingly we see organisations looking to finance to generate value by delivering insights that inform strategic decision-making and support growth.

The role of the finance function demands a new skills mix

To meet these changing expectations, finance needs new skills and talent. Finance technicians are still required, of course, but increasingly, there’s a requirement for professionals with strong communication skills and emotional intelligence – people who can engage effectively with stakeholders across the organisation and win confidence in finance’s ability to act as a strategic business partner.

There’s a growing need for tech skills too. Technology, including automation, analytics, and advanced Enterprise Resource Planning (ERP) systems, is already playing an important role in freeing up finance professionals to focus on higher-value, non-transactional activities. Meanwhile, data and analytics are key to generating the insights that underpin strategic recommendations. In reality, traditional accountancy training does not always equip finance professionals for this tech-driven world.

Talent is on the minds of CFOs

The changes underway in finance have pushed talent up the agenda for many CFOs. From our #CFOAgenda debates, we know that many finance leaders are struggling to recruit, develop and retain the talent they need - either for the present demands on finance, or for the future. They want to know what action to take now and how to prepare for what comes next.

Vision comes first

The first priority should be to clarify what role the organisation wants the future function to play. Some organisations will be happy to retain a traditional function focused on operational delivery and business protection. Others – and especially dynamic, growing organisations – will want a function that operates as a strategic business partner. No one size fits all, so matching the organisation’s specific ambition is key.

Use this framework to assess the demands of your finance function >>

Getting buy-in for that vision from the organisation is critical too. The leadership team needs to acknowledge that developing a strategic function and associated new capabilities is likely to be a more-costly enterprise than funding a lean, compliance-focused function.

Defining the services the finance function's future will deliver – and the systems, processes and organisation it will need to do this – starts to bring questions around talent into focus:

  • What specific talent will the finance function transformation need?
  • Where are the gaps in the existing mix and how can they be filled?

Strategic workforce planning can help provide the answers.

Build your talent pipeline

Because the future finance function will almost certainly require new and more-diverse skills beyond the traditional finance roles, such as data scientists and analytics specialists, organisations need to look beyond traditional sources, such as the graduate market, to find these. Recruiting school leavers to an apprenticeship programme is an increasingly popular route. Leveraging the apprenticeship levy can make training school-leavers up to AAT qualification a cost-effective option. Of course, it is important to remember that the levy covers apprenticeships at all levels and that it can help you engage with three of the biggest issues your organisation can face - skills development, diversity and inclusion, and talent retention.

Another option for building the talent pipeline is to develop existing talent. Placements in other parts of the organisation are one way to help those with potential to develop essential soft or technology skills for the talent-hungry organisations that come calling.

A clear employee value proposition (EVP) for the finance team can also help with retention. Career progression and reward structures may need to be different to those for the wider organisation, and tailored to meet the specific aspirations of the more-diverse workforce the function is seeking to build.

Be smart with short-term fixes

Recruiting from new sources and developing existing talent are both strategies for building skills for the short-to-medium term, but what about when talent gaps need filling now? The temptation to pay over market rates is strong, but this should be an option of last resort, particularly with tight budgets and IR35. Borrowing skills from other parts of the organisation or offering roles on a temporary to permanent basis (and therefore with lower rates than short-term contracts) are just two alternatives.

Set your direction

The changing role of the finance function means CFOs need to start thinking differently, not just about the future shape of their team, but how to find the talent to fill it. The future finance workforce will be more diverse, with a broader skill set than its forerunners. Having a clear vision of where the function is heading is key to building a workforce equipped to meet the challenges and seize the opportunities ahead.

For more information, please get in touch with Simon Davidson or Maddie Blanks.

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