CFOs who offer their teams a career culture based on experiences (rather than titles and promotions) and the ability to move between departments can reduce the compensation premium companies must offer to new hires by half, according to Gartner.
In the current highly competitive labor market, finance executives are hardly exempt from the challenges all business leaders are facing in attracting new talent. Making the problem worse, from a CFO’s perspective: 22% of current finance and accounting employees have a low degree of intent to stay in their current position, Gartner data shows.
As a result, it’s important for finance leaders to understand how their current employee value proposition is perceived by prospective and current employees and the criteria that are most meaningful to both of those audiences.
“Our research shows that two key attributes that both attract finance talent and reduce attrition are career culture and how employees view their ability to progress and develop,” says Hilary Richards, advisory vice president in Gartner’s finance practice. “Finance departments that organize around hierarchical job titles and limit teams to a single department communicate to employees that their ability to progress and tackle new challenges will be limited.”
Gartner surveyed more than 5,700 finance and accounting professionals and analyzed their responses against 13 attributes commonly associated with finance departments’ employee value propositions. The research found that finance departments with strong employee value propositions can reduce the compensation premium offered to new hires — the premium above their existing compensation or market value that employers must pay to win over attractive candidates — by 50%, compared with departments with weak value propositions.
An experience-based career culture emphasizes career experiences over promotions. New career opportunities are driven both by the needs of the business and the employee’s aspirations, making lateral moves beneficial for both parties.
Experience-based cultures can be attractive to senior employees, who may expect fewer opportunities for traditional promotions, and also to millennial employees, who prize diverse career experiences. Gartner research shows that millennials will comprise half of the corporate finance workforce by 2020.
“Experience-based work cultures make it easier for managers to identify opportunities for employees to gain new experiences, and build skills, with each new assignment,” says Richards. “For employees, this approach can help them rapidly upskill and provide opportunities for them to work on projects of interest, without having to wait for a vacancy to arise.”
Finance departments offering employees an experienced-based culture should ensure that it’s a highly visible part of their employee value proposition (EVP), Gartner advises. In order to promote the benefits of such a culture to attract talent, finance leaders should:
“Innovative finance departments have found multiple ways to highlight their EVP offerings to new recruits,” Richards says. “One of the key practices we identified is using the current experiences of employees and making their stories a visible part of the recruitment process.
She adds, “This can be done through highlighting current employees’ profiles and experiences on an external career website or encouraging blog posts from employees to talk about their roles and how their experience with the company has benefited their career aspirations.”