Building the right finance team is one of the CFO’s top challenges. Nearly three quarters of respondents to the Adaptive Insights “CFO Indicator Q1 2016: Big Data, Better Vision: The Agile CFO” survey said the biggest impact on their future role will come from talent management and skills shortages. Many of the newcomers to finance will come from the millennial generation. It’s therefore incumbent upon senior finance executives to learn how to attract and best manage this younger workforce.
Ajit Kambil, global research director at Deloitte’s CFO Program says one of the big challenges CFOs face is how to develop people and get the right talent in the right seat. The other is how to create a well-functioning team. “CFOs have to deal with the diversity of the workforce, which includes generational diversity,” Kambil said. “Millennials have a very different mindset.” Thus CFOs need to develop a new thinking about their career paths and consider how to motivate the new generation to keep the best performers engaged and loyal.
The challenges ahead
Millennials bring a lot of opportunities to the finance function. They’re curious. They’re innovative. They ask the right questions and have advanced analytical and technical skills. But as every senior finance executive will admit, this new generation presents some management challenges.
1. How to communicate?
According to Carl Seidman, an independent management consultant and trainer, millennials are more likely to want quicker results and a lot more engagement from their superiors. They want more feedback and more development opportunities.
Provide mentoring opportunities
Communicate openly, frequently
Ask them what they want
2. How to react to uber-ambition?
Millennials appear impatient to move to the next assignment, the next role, the next promotion. While it’s good to have ambitious staff, in finance a lot depends on building relationships. According to one finance professional: “In finance a lot of competencies take time to develop. You have to accumulate experience.” That means living through various business cycles. “If you are going to be a long-term value add, you got to stay somewhere for a while.”
Provide ongoing learning opportunities; keep them challenged
Offer team-based, cross-functional special projects
Initiate intra-finance rotational programs
3. How to provide continuous growth?
“According to all the studies I’ve read, the number one thing millennials are looking for is the opportunity for professional development,” said Jim Kaitz, president and CEO of AFP. Companies that are unable to provide that opportunity will face the consequence of higher turnover. “But if you create a learning culture, you can create loyalty in that group.”
That’s one of the reasons AFP is offering the Certified Corporate FP&A Professional designation. The certification process includes mastering a comprehensive body of knowledge and passing a two-part exam. In fact, according to the Wall Street Journal, it’s a viable—not to mention cost-effective—alternative path to an MBA.
Support continuous education
Offer internal training and career development
Sponsor external professional designations
4. How to get beyond the busy work?
Day-to-day finance work may not be too sexy. By rotating staff through different assignments, companies can ensure millennials get diverse experiences, and that has to be part of the recruiting message. However, it needs to go beyond the message. It must be delivered.
Don’t just promise a growth environment—deliver!
Automate the daily grind to free up time for analysis and offer technology that provide user friendly experiences.
Offer exciting projects to supplement day-to-day work
5. How to provide a better work/life balance?
Millennials place a higher value on work/life balance. They want to have a personal life other than work. While previous generations needed to fit life into work, this generation needs to fit work into life.
Recognize the reality of 24/7 work—working hard doesn’t mean spending long hours in the office
Offer flex-time policies and remote-work opportunities
Focus on tangible contributions
6. How to outline a career path?
Before taking up any position, millennials will ask what the company can offer. They want to know their career progression in the next 12-18 months. “As managers, we need to constantly engage them through open communication, coaching etc.,” one Asia-based finance director said.
Chart out a career path based on each millennial’s interests
Work together to list what experiences they can expect in the organization
Encourage them to try out other facets of the finance department
7. How to manage in a less hierarchical way?
Baby Boomers managing millennials need to adopt more of a mentoring role, according to Christine Hollinden, president and founder of Hollinden Consulting. “Millennials want to know why they’re doing what they’re doing and how it fits within the bigger context of their world,” she said. According to Hollinden, more than anything, millennials seek new experiences that are not necessarily built into the traditional organizational structures.
Don’t do things just because that’s how they’ve always been done
Think outside the linear/hierarchical
Take millennials along to trade shows and client visits (above their “pay grade”)
8. How to make sure they finish what they started?
Several senior finance executives complained that it’s sometimes hard to get millennials to stick to a project all the way to its completion. Some run so fast that they lose sight of the details along the way. Others lose interest before they reach the finish line.
Provide ongoing project support
Hold them accountable and set clear milestones
Celebrate a job well done
9. How to balance risk and opportunity?
Finally, millennials are more likely to take risks than previous generations. That’s clearly a challenge for their supervisors. While some level of risk is beneficial, the finance function is traditionally risk-averse. CFOs want their teams to think outside the box and take initiative, but too much risk can lead to bad results and in finance, unacceptable ones.
- Make the organization’s risk-tolerance policy very clear
- Watch for any signs of excessive risk taking
- Rely on other managers and business partners to sound the alarm
As CFOs look to build the best finance teams they can going forward, they need to become more adept at managing millennials. “This is not something that managers can handle five years down the road. It’s something you need to be addressing today,” said Chris Ortega, manager of financial planning and analysis (FP&A) at WebLink International, and himself a millennial.
“What I’m seeing is that a lot of high-level Baby Boomer executives are not in tune with even the basic characteristics of this younger workforce. This is mission critical now. In 10 years, these young workers will make up 75% of the workforce. You want to make sure that you have the right environment. You want to stay competitive.”
Nilly Essaides is the director, financial planning & analysis practice, at the Association for Financial Professionals. For additional insights on developing and managing millennials, attend the session
Our CFO Indicator Q4 2016 report reveals that while 85% of CFOs say their teams have direct access to the financial and operational data needed to generate accurate reports, it is the non-value-added tasks—like data gathering, verifying accuracy, and formatting reports—that take time away from the strategic analysis desired by top management and other stakeholders. Most CFOs also cite data integration as the biggest technology hurdle to gaining actionable reporting information, given the increasing need to report on both financial and operational data typically housed in disparate, unconnected systems. Read our other CFO Indicator reports here.