JUNE 6, 2023
As economic disruption continues its undulating impact on industries, Chief Financial Officers (CFOs) must be the strategic guide for their organization during challenging times. Today’s CFOs are critical figures in leading digital transformation, and they are drivers of continuous growth through strong partnerships with leaders across the organization. However, financial leaders now face an increasingly formidable challenge to meticulously allocate adequate attention and money to the most deserving enterprise resources.
Persistent inflation and recurrent talent crises weigh heavily on CFOs - hiring and retaining staff, forecasting and optimizing costs are their top three challenges for 2023, according to a Gartner Survey. Marko Horvat, Vice President, Research in the Gartner Finance practice noted, “CFOs need to identify the few critical areas where investments should be accelerated, such as human capital and digital investments, while optimizing costs against a backdrop of stubbornly high inflation; this is no easy task.”
This year, Evanta, a Gartner company, launched CFO communities across North America to support financial executives from the world’s leading organizations and provide a space where they can connect, share and learn from one another. Just recently, CFOs in the Chicago community came together for their inaugural Inner Circle Dinner to network and discuss their mission critical challenges.
The format is excellent. The guided conversations were both relevant and thought provoking.”
- Stephan Maritz
Chief Financial Officer, AMLI Residential
During the dinner, Governing Body Members led small group discussions on strategies for hiring and retaining talent in a tight labor market and cutting the right costs in the face of inflation. Leading the discussions were Peter Hirs, CFO, Zurich North America; Travis George, CFO, Molex; Brett Chloupek, Executive VP & Chief Financial Officer, Heico Companies LLC; and Jeremy Fine, CFO, Chicago Transit Authority.
The groups then exchanged key takeaways. We share these findings without CFO community member identifiers to ensure the integrity of our gatherings:
A Focus on Upskilling Talent
Each group stressed the importance of investing in upskilling their workforce, especially for digital skills, and many shared the tactics they are implementing. One CFO stated, “One method is to create internal programs for digital acceleration.” Another shared, “Bring talent into groups where they can learn together. If someone doesn’t have the skillset, embed them in other groups. If someone is extraordinary, embed them into groups where people need to grow.”
Another financial leader mentioned that they “invest in people who have a runway.” Since technology changes so quickly, they try to avoid hiring people who only have skills in the “hottest” technologies, because they will not be marketable in a few years.
Addressing Data & Analytics in Finance
Data and analytics was a recurrent theme discussed by the groups. One CFO stated, “The challenge we have is training finance people to influence business partners effectively,” and they noted how data and analytics capabilities are a critical component to improving this.
Another CFO shared that they currently make data and analytics a competition between talent, but they question if they should create a specific finance D&A function or continue to upskill in this area. They stated, “Skills can get stale… but does that [having a functional name] bring more attraction to it?”
Another financial leader shared that their team collaborates closely with a research analytics team - who provides the data - and they have strong data literacy to use it effectively. They stated, “Do you want to be a thermometer or a thermostat? A thermometer tells the temperature, a thermostat changes it.”
Balancing Talent Costs with Technology
Financial leaders in both the private and public sectors have similar concerns regarding the economy, with many feeling constraints from rising labor costs. To aid in recruiting and retention, common tactics among attendees include sign-on and retention bonuses, but there are varying approaches for long-term solutions. To make up for these increased expenses, one attendee cited how they can no longer pass the costs onto customers, like they did in the past.
Many are trying to balance the cost of talent with the cost of technology transformation, and one CFO disclosed, “We want to invest in people, but I think everything is changing. If you want to be better in the market you have to have better pricing. If you want to have better pricing, you have to have better technology and less people.” Others discussed offshoring. Overall, they expressed how this needs to be a central issue, and they should prioritize mitigating it.
The CFOs’ Role in Corporate Culture
CFOs acknowledge that compensation is not the only factor employees consider when staying with a company, and they are focused on fostering collaborative company cultures to keep top talent. They shared differing strategies for how they are addressing culture, with in-office versus remote work environments as a hot topic.
Many CFOs mentioned the challenges of meeting the needs of a new generation of employees - who more often want to work from home. They said, “We had a lot of conversation about attracting and retaining talent—especially with younger folks coming in. How do you incentivize them? Quality of life is a main part of the conversation. ESG is a big attraction for folks coming into the company, as well.” Another shared how it's critical to start with managers when creating a positive corporate culture.
There were some proponents for in-office work with one CFO stating, “People need to come to the office to understand the culture of the company... Having communication skills is important in this space, but those are skills people learn when they’re together.”
As the economic climate and technology landscape continue to evolve, it’s more important than ever for financial leaders to connect with peers about their common challenges. CFOs in attendance shared their experience at their first Chicago CFO Community gathering:
It exceeded my expectations. Great from the start. The Evanta team was outstanding. Very welcoming and willing to introduce me to CFOs who had already arrived.”
- Pat Jermain
The location was great, the space provided for easy mingling, and the discussions were purposeful.”
- Jessica Brandenburg
For more about this topic and to stay on top of what your CFO peers are discussing, apply to join a CFO community near you, or check out our calendar to see when your local CFO community is gathering next.
by CFOs, for CFOs
Find your local community and explore the benefits of becoming a member.