It’s far from your sole focus — but, as a modern CFO, recruitment remains one of the most important hats you have to wear. Time and again, it’s been shown that the most successful finance organisations are invariably the ones which are best able to recruit and retain great people.
In this article, we’ll talk about both these crucial factors — with expert advice on how to get the right people on board, and keep them engaged.
1. Prioritise cultural fit when recruiting
Traditionally, finance recruitment has tended to prioritise job fit before anything else — skills and experience have typically been the foremost considerations in filling any role.
However, this approach overlooks the critical importance of culture fit. Author Erika Andersen describes corporate culture as ‘patterns of accepted behaviour, and the beliefs and values that promote and reinforce them.‘ She also describes poor culture fit as the ‘most important reason people fail in a new job.’
Hiring candidates who don’t fit your culture can have far-reaching negative effects. Not only are they unlikely to settle into the role themselves, there can also be a knock-on effect on those working around them.
It seems counter-intuitive, but there are times when the most outstanding candidate on paper may not be the right hire for your business. What’s perhaps even more important is their ability to slot into your business culture and contribute positively to your team, in line with existing values and cultural norms.
In his book ‘Reinventing the CFO,’ Jeremy Hope argues that this is at the root of many recruitment problems for CFOs. He writes, “Too many finance people are recruited on the basis of fit with the job rather than fit with the culture.” He cites Southwest Airlines Chairman, Herb Kelleher, who says, “We can change skill level through training. We can’t change attitude.”
One CFO who bucked this trend was Jim Parke, during his tenure with GE Capital. One of his initiatives was a financial management programme that hired talented undergraduates regardless of their knowledge of the finance industry. This programme covered the basics of finance — but was ostensibly a leadership development program. “I’ll put that group of people over the years against any audit group in the world,” he says. “They are the best.”
It’s easy to appoint based on experience — but we should never forget to gauge culture-fit and, above all, talent. Experience and education can follow.
2. Understand generational changes and offer pathways for development
Hiring great people, of course, means being able to attract the best candidates. Talent is, clearly, always in high demand, and you need to offer a package that attracts the right calibre of candidate.
Clearly, some of this boils down to salary and perks. But there’s more to it than this. Generation Y — born roughly between the years of 1980 and 2001 — now makes up 30-35% of the modern workforce, and they have vastly different aspirations and expectations of their employment — flexibility, responsibility and an entrepreneurial environment to beat out their own career path.
This generation particularly values the ability to make lateral or international moves. Hire someone whose 10 year goal is to be a CFO, and present them with a clear path for career development, including the ability to experience overseas work. Empower these people with broader roles and opportunities to contribute to high level decisions.
Frame this within your job specifications and discuss it during the recruitment process.
The cost of low retention
You’ve probably heard the saying that staff are your most precious commodity, and there’s certainly a compelling financial case for focusing on staff retention. This case becomes even more compelling the higher up the organisational chart you go.
Research suggests that, while it costs around 30-50% of their annual salary to replace an entry level employee — this number rises to 150% for mid-level employees and 400% for highly specialised employees. It can take an average of 40 days to find a replacement and costs over $50,000 to replace a mid-to-high level finance employee.
The following approaches are designed to help you boost engagement and retention.
3. Use ‘MAGIC’
When it comes to the key determinants of employee engagement, there are many schools of thought. One particularly good model is the ‘MAGIC’ acronym advanced by Tracy Maylett, author and CEO of management consulting firm DecisionWise. This is made up of:
- Meaning — what is the wider internal narrative of what the employee is doing? (Paul Jun at Helpscout wrote a great article about the power of internal narrative)
- Autonomy — do they have authority to make their own decisions?
- Growth — is there room for them to learn, develop and progress?
- Impact — are they making a difference within the overall objectives of the business and their team?
- Connection — how connected does the employee feel with the organisation and the people they work with?
4. Insist on openness, transparency and communication
There’s no getting around it — communication is key; so are clarity and honesty. According to Gallup research, employees whose managers hold regular meetings are three times more likely to be engaged.
This can be a real time-sink, so why not consider daily stand ups? These 15-minute, stand-up gatherings have their origins in the world of software development. They’re designed to take place at the same time each day, with each member of the team present, to discuss high-priority issues and ensure your team has a regular heartbeat.
You also need to be approachable yourself — more than half of respondents in Gallup’s employee engagement poll who said they felt they could approach their manager with any question considered themselves ‘actively engaged’ — a number which plummets to 24% for the next highest rating.
It’s more than simply having an open-door policy. As Bud Kulesza wrote back in 2011, an open-door simply makes you accessible — not approachable.
“Best-in-class finance organizations have solid working relationships that are built on trust and communication, led by CFOs who are both accessible and approachable,” Kulesza wrote.
“They lead by getting out of their office and proactively speaking with staff about numerous topics, both professional and personal. They show concern for the well-being of their staff and, in doing so, create a sense of esprit de corps within the team.”
Successful CFOs need to combine accessibility AND approachability to ensure a clear line of communication with your team.
5. Seek feedback and maintain a healthy dialogue
The role of the CFO may once have been top-down. Nowadays, more input is required from your team. Often, issues will arise that might lead to unrest within your team — and it’s important to have a mechanism in place to ensure you can solve these issues as smoothly and efficiently as possible.
Of course, there are two obstacles here. One, the demands on your own time — largely spent with other C-suiters. Two, the actual mechanism by which feedback is collated and processed. Many employees are understandably nervous about providing feedback to their boss.
One company which took an interesting approach to feedback was The Motley Fool, a multimedia financial-services provider (as reported by Entrepreneur.com.) Instead of asking employees to report to their boss when it comes time to give or take feedback, they encourage employees to choose from a list of designated “feedback coaches.”
These coaches are well-versed in handling employee feedback and, most importantly, take some of the fear out of the review process.
Selecting a few of your team to handle employee grievances and convey feedback could be the key to eliciting honest, constructive feedback on a range of issues.
Building a great team is fundamental to the success of your finance department — and, consequently, your own success as a CFO.
This starts with recruitment. There is much to be said for casting your net wider — beyond traditional ‘finance’ people, and beyond mere ‘job fit.’ Think about culture; who is the best fit for the people you have in situ, and the way you already work?
Offer the right rewards, with opportunities for lateral and international moves. Provide a clear pathway; bring in ambitious people who want to go places, and have the talent to get there. Even if they don’t know a thing about credits and debits — the experience will follow!
Once your team is together, it’s important that you never stop seeing things from their point-of-view. What would you want from a boss? Operate daily with openness, transparency and honesty. Make yourself approachable and seek feedback. Set clear, realistic expectations and ensure progress is regularly reviewed.
Following these guidelines will put you well on the way to a formidable team. Good luck!