Often when finance staffers leave, a key reason is a lack of opportunity for growth. “Most of the finance functions we work with are not in growing budget situations,” says Eisha Armstrong, a managing director in the finance practice at CEB, the research and corporate advisory firm. “They’re flat. So they certainly can’t add positions for people to move into.”
Armstrong says that about six months ago her group noticed that CFOs were increasingly asking for help with talent strategies, specifically with regard to millennials. “It caught us a bit by surprise, because we’d kind of assumed that the talent management strategies we had been discussing previously would apply across the board,” she notes.
CEB’s finance unit set about pulling together data from various research projects to arrive at a stereotype-free assessment of what drives millennials’ decisions to stay with or leave employers. From its 2014 Global Labor Market Survey of 17,971 corporate professionals, it identified the size of gaps in the value placed by millennials versus other generations on 24 work-environment attributes.
For 14 of the attributes, the gap was 2% or less. But some of the other results provided the basis for some recommendations on how to hang on to younger, high-performing, or high-potential finance talent.
Millennials were 11% more likely than their older colleagues to place “future career opportunity” among their top five attributes, and also more likely to so value “development opportunity” (6% gap) and “growth rate” (5% gap).
At the other end of the spectrum, millennials were less likely than others to count retirement benefits (6% gap) and compensation (5% gap) among their five most important attributes. (Next on this list was the 4% gap for “ethics/integrity.” Apparently, millennials are at least honest about what they value.)
The CEB finance unit offered several recommendations for CFOs who are finding it difficult to retain their younger talent.First, think seriously about launching a job-rotation program if you don’t have one, or expanding your existing program. “The more you can signal that there are opportunities, even if they’re lateral opportunities rather than upward ones, the more success you’ll have with millennials,” says Armstrong.
Rotation programs can take several forms: geographic, where the finance staffer works at far-flung company locations; intra-finance, moving among different roles within the finance function; and business-unit rotation, where the staffer leaves the centralized finance function to work at business units, in either a finance role or a different function.
But 60% of companies polled by CEB don’t have a formal rotation program (see chart, above). It may not be practical for companies smaller than about $1 billion in revenue, with fewer people to spread around. Also, notes Armstrong, lean finance staffs may not be able to perform a best practice for rotations: having the person who’s been doing the job that the rotating staffer will be filling stay on for awhile in the early phase of the learning curve.
Second, if the company is too small or for other reasons can’t provide rotations, put some rigor around identifying special projects for high-potential staff who are early in their careers. A good project helps them develop skills, scratches that itch of wanting more development opportunity, and exposes them to senior officers, both within and outside of finance, according to Armstrong.
Third, shorten the learning curve for new hires. One way to do that is to make more of an investment, not just in formal training but in on-the-job training and coaching, Armstrong says. CEB research shows that millennials are 14% more likely than other generations to think on-the-job learning is effective in teaching them new skills and knowledge.
“Most managers in finance aren’t really held accountable for training and coaching their people,” she says. “And if we look at how proficient they are in coaching, their scores are low. They’ll even say, ‘I don’t know what good coaching looks like.’ But this is another way for millennials to feel they’re being invested in. By getting that development opportunity, they’re more likely to stay.”
Fourth, try to increase the success rate of external hiring. That may sound obvious, but, says Armstrong, “there hasn’t been that much that’s been incredibly innovative in how companies source and recruit finance and accounting talent in the past 20 years. They tend to use the same programs to recruit from universities, they target the Big Four firms for midlevel recruits, and when they hire people, they primarily assess for industry knowledge and technical expertise.”
The best finance organizations, she says, are looking more at softer skills, like leadership potential, business acumen, and communication skills. Possessing such abilities “correlates more highly with longevity in positions and with the company,” Armstrong says. “People with those types of softer skills are more versatile. They can do more than the role they were hired for, opening them up to more career opportunities with the same company. They also have the potential to move up to management and leadership roles over time.”