Leading finance teams employ nearly 40% more people in ‘business partnering’ roles and pay around 25% more than typical functions to help attract quality professionals.
Finance teams’ more prominent role in business management is leading to a move away from basic processing and control, towards greater involvement in the development of corporate strategy. The skills they need to perform their frontline role are evolving rapidly.
In turn, finance’s role in risk management is going beyond financial risk to include enterprise risk management. Compliance and risk management knowledge are increasingly rated as key competencies across all finance roles as they’re required to provide greater challenge and create awareness across the business.
Everyone, rather than just people working in business partnering roles, now requires a close understanding of the commercial drivers facing the business and the interpersonal skills needed to engage with frontline teams. The challenge for many finance teams is how to recruit and retain the right combination of competencies for the different roles. Top performing finance teams are taking a more forward-looking approach to talent management. This includes marking out people with special potential, using clear and consistent criteria to help nurture the right skills, competencies and behaviour for key future roles.
The leaders are also developing clearly defined career paths to senior positions, which are helping to strengthen the talent pipeline and encourage greater retention. Succession plans are in place for more than 90% of key finance roles in the top tier finance teams, compared to only around 40% among the average performers.
Putting your business on the front foot is based on detailed data from benchmark assignments in more than 200 client organisations, including leading global groups.
The backdrop to the report is financial teams’ increasingly crucial role in strategic decision making as well as managing risk and uncertainty. Having become used to operating in a volatile environment, what businesses most need from finance is the forward-looking insights needed to help them compete in local, regional and global markets.
Our analysis raises questions about whether key management information is sufficiently relevant or timely to be of real use and whether financial risks are being managed effectively. The underlying concern is the extent to which some finance teams have found themselves caught in the headlights of uncertainty and change, reacting to events in a defensive manner, rather than dealing with them in a proactive or decisive way.
The Finance effectiveness benchmarking study 2012 highlights what top performers are doing differently in response to these challenges.