For many chief financial officers (CFOs), talent management doesn’t top the list of crucial tasks to perform – or crucial career skills to obtain. While most CFOs consider people management important, they rank its importance in their own day-to-day functioning within the organization less highly than other tasks. Some leave talent management to the human resources department altogether, reasoning that dividing up responsibilities in this way frees CFOs to focus on revenue growth.
However, research indicates that effective talent management is one of the most-overlooked methods of driving business growth. According to a recent study by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA), nearly half of CEOs and CFOs admit that their organizations have failed to meet financial goals in the past 18 months because they lack effective talent management. One in four said their lack of effective talent management prevented the company from innovating effectively.
Meanwhile, a Boston Consulting Group study released in 2013 found that companies “highly skilled” in effective talent management achieved greater revenue growth and profit margins. In the study, the firms with “highly skilled” HR teams outperformed the “lesser skilled” HR teams by up to 3.5 times.
How can CFOs use this information to their advantage? Consider the following tips:
- Think long-term. Companies that treat their responsibility to new hires as nothing more than compliance with labor laws miss a key opportunity. Instead, think about how a new hire will help the company grow in the long term. Consider the skills and experience the candidate brings to the table, as well as the abilities he or she has expressed an intention to develop.
- Know who is accountable. Many organizations lose the chance to leverage their talent effectively because they do not know who is responsible for talent management. In the AICPA/CIMA study, 83 percent of HR managers said talent management was their job – but in the same firms, 65 percent of CFOs said the responsibility belonged to them. Communicate openly between departments to streamline and focus talent management.
At Daley and Associates, our experienced Boston executive recruiters specialize in helping financial firms find and keep the talent they need to drive growth and compete fully in their fields. Contact us today to learn more.