The shortage of young finance talent is widely discussed among CFOs, but rarely closely examined. The shrinking unemployment rate has drained the talent pool in many corporate functions and industries, and companies continually complain that they can’t find qualified staff. For finance departments, the problem is different: If they were looking solely for the technical skills they wanted years ago, they would be overwhelmed with candidates. Today, though, such skills are table stakes, and the focus is on finding people who stand out because they have other desired qualities as well.
For one, given companies’ increasing reliance on data in decision-making, demand is soaring for a demonstrated aptitude for analytics. Even more important for the long-term success of new hires, however, are assorted “soft” skills that allow them to communicate and collaborate with others, as well as influence others’ attitudes and behaviors.
“There isn’t a shortage of finance talent per se, but there is a shortage of people who have both technical expertise and these additional skills that will enable them to work well inside an organization,” says Tom McGuire, a former CFO of Revlon and a longtime Coca-Cola executive who now runs a talent-management firm.
Given this shortage, finance departments are aggressively positioning themselves as employers of choice. And they can’t allow themselves the luxury of easing up on that quest, since their competitors are doing the same thing.
In a recent Ernst & Young survey of 769 finance leaders, 57% said building predictive and prescriptive analytics capabilities is critical for their companies’ futures.
“With talent, my focus is more on improving our analytical and problem-solving skill sets to drive better decision support for the enterprise than it is on finance [per se],” says Jan Siegmund, finance chief at ADP, which provides human resources management software. “Those skills are hard to teach, so there’s a strong emphasis on finding people with that type of talent.”
In some cases, organizations are just happy to find candidates who can demonstrate an awareness of the role analysis is increasingly playing.
“Companies are telling us they want finance students who know how important analysis will be in any finance function and who show a willingness to embrace and explore analytical tools and methods,” says Aron Gottesman, chair of the finance and economics department at Pace University’s Lubin School of Business. “Students don’t necessarily need to know how to code.”
Many companies that are successfully hiring young candidates with prowess in analytics are looking beyond traditional sources like business schools and accounting firms, according to CEB, a talent research and advisory firm.
“The problem is that demand for those candidates far outpaces supply,” says Steven Williams, CEB’s finance practice leader. “Finance organizations should be looking for people who may not have the desired business background or professional experience but who possess the analytical skills finance employees need now and in the future.” Industry analysts, journalism graduates, and university faculty all potentially fit that mold, he says.
Talking the Walk
As important as analytics and technical capabilities are, various soft skills are valued just as much, if not more. In interviews with students on university campuses, “some companies are doing a quick technical test and spending most of their time evaluating the candidate’s soft skills and fit with the firm,” says Jeff McNish, career development director with the University of Virginia’s Darden School of Business.
There is also dramatically increasing demand for people with effective communication skills because the role of some finance staffers is changing. For example, like Siegmund, Joel Bernstein, CFO of global customer operations for SAP, is pushing his finance team to provide more decision-making support to business units and functions. He says he is challenging team members to “get out from behind their desks” and speak directly to internal customers, and, for example, convince them that a decision they made is inferior to one recommended by finance.
“This is very relevant for the people we hire,” says Bernstein. A candidate who puts together spreadsheets and exports data for charts is very different from someone “who can stand in front of the sales leadership team and challenge their decisions.”
Such skills are especially prized given SAP’s ongoing transition from a seller of on-premises software to a provider of cloud-based systems, which requires significant rethinking by almost all of the company’s business units and functions. Bernstein refers to people SAP brings onto the finance team with the proper mix of analytical and persuasion skills as “transformation agents.”
For example, say an SAP cloud business overachieves on its new-bookings targets but struggles to reach its cloud revenue targets. The business leader may challenge the financial modeling around how the backlog of bookings turns into revenue, and therefore request budget relief.
In such a case, a transformation agent might identify the root cause of the revenue shortfall as delayed provisioning or another operational challenge that negatively impacted time to revenue. The recommendation from finance might be to focus on operational improvements that drive a holistic business solution. The business leader may or may not be a receptive audience for such a recommendation, underscoring the value of communication skills.
Some staffers hired out of university degree programs have the skills to begin acting as transformation agents right away, Bernstein says. Others are provided with training on how to transition to the role.
The need for finance staffers who can communicate well with internal customers is hardly unique to SAP, he adds. Bernstein has regular contact with CFOs at companies that are current or potential clients of SAP. “There are very few companies I’ve talked to that aren’t in [some kind of] transformation.”
To find good communicators, Alicia Davis, director of learning and development for global finance at Dell, uses open-ended questions during interviews at universities.
“Candidates can show communication skill by answering a question thoroughly but not taking 20 minutes to do so,” she says. “At the same time, if I come back with a second and third question, I want to see if they can go deeper.”
Being a good communicator is based in part on persuasion skills, and, especially for young finance professionals, on understanding the language of finance. Pace University’s Gottesman goes as far as identifying an understanding of the language of finance as the number-one requirement for a student aiming to land a job coming out of school.
“Some people don’t go into finance because they don’t like math, but that’s not the real challenge of finance,” Gottesman says. “What companies are looking for are language skills. No matter what quantitative or other skills candidates have, no matter how smart they are, if they don’t know the language they don’t know the field. And of course, the language of finance is often quite opaque or cryptic.”
All Together Now
Collaboration skills are closely tied to communication skills, and are also hot in today’s business environment.
Some older business leaders still think in terms of silos, where finance, sales, marketing, HR, and other functions largely operate separately, notes McGuire, now a managing partner at Talent Growth Advisors. But today, in most sizable companies, work is organized in cross-functional teams. New hires will be placed on these teams, “so they must have skills that will make that team stick together,” says McGuire.
It’s important, he says, for companies to ask finance candidates to give examples of how they’ve contributed to a team and to pay close attention to the responses. “Look for examples of how they anticipate needs by building value-based relationships,” he says. “When do they seek feedback? When do they change how they do things?”
Unfortunately, the curricula of business and finance programs at colleges and universities still tend to be quite silo-oriented, says Tom Conine, a finance professor at Fairfield University. That’s an impediment to the development of collaboration skills.
“Regardless of how progressive some universities, including Fairfield, think they are, when you look at them closely they’re still teaching pure finance, pure marketing, pure management, pure operations research,” says Conine, who’s also president of TRI, a firm that conducts educational programs for finance staffers and executives of large corporations.
“Because of that,” he adds, “people graduate with a silo mentality. It’s one of the first things companies have to break kids of in entry-level programs.”
Soft and Strong
Conine is a staunch advocate for the value of soft skills. “When people come out of college they tend to have very strong hard skills, but in business the need for those very rapidly begins to wane,” he says. “As they progress in their careers, they will find that the importance of soft skills will eventually surpass that of technical ones.”
In both his classes at Fairfield and in the corporate training he runs, Conine takes students through various simulations of business scenarios that are designed to make them better communicators, negotiators, trust-builders, and influence-makers.
In those programs, he also stresses the need to work under conditions of uncertainty. “That is extremely important for any entry-level person,” Conine says. “There is tremendous time pressure. Resources are scarce. There is divergent opinion all around them. And most of all, there is limited information.”
Most business decisions must be made with no more than 60% to 70% of the information that ideally would be available, he notes. “That drives technical people nuts at the entry level,” says Conine. “They think there should be an equation that factors in all information. But that doesn’t exist.”
Other soft skills that Conine says will help entry-level finance professionals succeed—and that corporate recruiters should look for—include the following:
- An understanding of the difference between management and leadership. In other words, an awareness of the necessary balance between delivering on short-term tactical needs and committing to deliver on a simply articulated vision.
- Flexibility, which Conine calls an “options mentality.” Business conditions are always in flux, so employers want people who aren’t rigid in their thinking.
- The ability to draw inferences from data. There’s so much of it available today that sensing what’s reasonable to infer is becoming a critical skill, he says.
- An understanding of ethics as it applies to all aspects of work.
- The ability to engage with others both face-to-face and virtually. “Those involve entirely different team dynamics,” Conine says.
Recruiting is a two-way street. Just as finance organizations are evaluating potential hires, candidates are evaluating potential employers.
Perhaps the most commonly used strategy to attract talented young people to a company is to develop and communicate a strong brand. That’s essential for any corporate function, but particularly so for finance, where exceptional talent at junior levels is relatively scarce.
“It’s very important for CFOs to think about the brand of their finance organization,” says Ajit Kambil, global research director for Deloitte’s CFO program. “How is it perceived externally?”
An excellent method of finding talent, Kambil and others note, is to enlist young hires as brand ambassadors to help recruit their contacts. But in order to do that, companies have to treat their junior staffers well and make them proud to be part of the organization.
For ADP’s Siegmund, getting senior executives involved in the hiring process, even for junior positions, is a key element of branding. Siegmund himself does that. “If you care about talent and show it, it permeates the organization” and sets an example, the CFO says. “My direct reports see almost every person we hire. That kind of focus has made a difference for us.”
Williams at CEB notes three traits of finance organizations that excel at recruiting the current generation of young workers:
- Strong social media presence and mobile-friendly websites and application portals
- Millennial-friendly corporate culture, including benefits such as sign-on bonuses, formal peer mentorship programs, and flexible work hours
- Diverse career-path opportunities and formal, finance-specific rotational programs (especially with an international component)
“The market is so competitive right now that organizations that can paint a picture and provide a sense of purpose around what a career in finance means will get their pick of the better candidates,” says Myles Corson, financial accounting advisory services markets leader for Ernst & Young.
But does putting such a heavy focus on communicating career paths fly in the face of the reality that young professionals today are far less likely to stay with employers for the long term than previous generations did? “They leave faster if you don’t,” says UVA’s McNish.
David McCann is a deputy editor of CFO.
Why hire people with work experience if you think training them yourself is a better idea?
Companies have different takes on the optimal mix of young finance talent. Some prefer to hire people with a few years of experience at an accounting firm or other company and hire relatively few people straight from degree programs. Others go the opposite way.
Dell, for its part, doesn’t want anyone it hires into a finance role to have work experience at all. That’s right: experience is a bad thing.
And the company doesn’t particularly want people who have graduate degrees in place of work experience. It will, though, take those who have master’s degrees based on three years of study in one discipline and two in another, or graduates of five-year accounting programs. But except in rare cases, the rule is: no work experience.
Why? Simply because Dell thinks it can do training better. “Over the years we’ve found we can train and develop our people internally,” says Alicia Davis, director of learning and development for global finance. That’s actually not a unique stance; a handful of other large companies, such as American Express, Dow Chemical, Ford, and General Electric, generally have the same policy.
Dell looks for people who display an inquisitive mind, are eager yet humble, and have demonstrated some sort of leadership, like having an online business, serving as an officer in a fraternity or sorority or a resident assistant in a dorm, or being active in community service.
The company also wants good students, “although we’re not one to say everyone has to have a GPA of 3.8 or higher,” Davis says. Why not? “Someone could have been in the wrong major and changed, or had a significant personal issue going on,” she says.
The finance department takes on at least 200 interns every summer, of which 120 to 150 end up getting hired for full-time positions.
Dell puts all entry-level finance staff into a program with either four six-month rotations or three one-year rotations. That experience is coupled with face-to-face training that includes classes four or five days per semester, a week-long conference every six months, and two self-study research projects per semester. The training takes up about 10% of a staffer’s time.
Only about 5% of those chosen for the program self-select out. “Maybe the program is not for them, maybe finance isn’t for them, or maybe Dell is not for them,” Davis says. “I’ve seen people go to sales and marketing. I’ve seen people say they needed a little more time to work at a level but yet we still saw a lot of potential in them. And some people say high-tech was not the right fit for them.” — D.M.