Recruiting and retaining the right resources in the finance function has never been more critical due to accelerating adoption of new technologies and complying with a growing list of regulations. But a finance labor shortage often stands in the way of these imperatives, posing operational risks.
Protiviti’s latest Executive Perspectives on Top Risks Survey, conducted annually by Protiviti and North Carolina State University’s Enterprise Risk Management Initiative, identified talent and culture as top risks, along with technology and innovation. Chief financial officer (CFO) respondents to the survey named “succession challenges and the ability to attract and retain talent” among their top five risks and gave it a higher risk rating than last year.
The Benchmarking Accounting & Finance Functions: 2019 report from Robert Half and Financial Education & Research Foundation cited “hiring skilled professionals” as finance leaders’ greatest challenge. More than 90% of CFOs in the U.S. and Canada struggle to find staff; many other countries feel the same pinch.
November’s U.S. Bureau of Labor Statistics’ Monthly Job Summary confirms the surveys’ sentiment. While the report showed a general unemployment rate in the U.S. of 3.6%, the rates for financial managers, analysts, accountants, auditors, bookkeepers and clerks are all below that already-low average.
New Technology, New Regulations
Finance leaders struggle to find skilled resources even as they deal with growing compliance obligations and digital transformation initiatives. Cloud applications, automation and recent major changes to accounting standards are some of the major trends that can alter labor demands — necessitating a change in skills, a change in staffing levels or both.
Firms are increasingly looking at cloud-based alternatives to their on-premises enterprise resource planning (ERP) and other systems. Our 2019 Finance Trends Survey shows that CFOs are growing more comfortable with hosting financial information in the cloud, recognizing advantages in performance, availability and security. In 2018, 25% of U.S. firms had no plans to use cloud technology. Those numbers fell three points by 2019. About 75% of survey respondents already have applications in the cloud. This trend calls for finance talent that is digital-savvy and can adapt to new applications quickly. The traditional custom-developed accounting software is disappearing quickly, and so will the people who resist the change.
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