Why the future of finance depends on new skills
As many economies emerge from the pandemic, the “Great Resignation” has brought people's issues sharply into focus. Workers have resigned in their droves to escape burnout and inflexible working conditions. According to McKinsey, more than 19 million US workers — and counting — have quit their jobs since April 2021, a record pace disrupting businesses everywhere.
Furthermore, a 2021 survey by PwC found that 65% of employees were looking for a new job, and 88% of executives said their company was experiencing higher-than-normal turnover.
Against the backcloth of such profound changes, CFOs need to weave in the likelihood of a talent shortage for the foreseeable future and the need to retain, nurture and upskill the valuable resources that they already employ in the finance function, as they grapple with the demands and opportunities that new technology presents.
The impact of new technology
For years, many finance professionals have fretted that nascent technologies such as machine learning and AI (Artificial Intelligence) will displace jobs in the finance function, but FSN’s research suggests that this pessimism is misplaced and premature.
The pandemic has hastened the acceptance of many new technologies including AI and machine learning and FSN’s study supports the view that these technologies will mature over the remainder of the decade, but it is too soon to say that they will erode job prospects. 60% of finance professionals believe that the technologies are not transparent enough to provide a dependable platform for forecasting and a similar number complain that it is difficult to see how automatic forecasts can be produced and amended as needed.
Perhaps tellingly, despite the pervasiveness of technology in all aspects of our lives, our confidence in machines has waned somewhat. In 2017, 24% of finance executives said they thought machines will always be better at predicting the future than humans. Today that figure is 19%.
Finally, 51% of senior finance professionals say that automation of finance processes alone will not liberate enough time to meet the objectives of the modern finance function. While technology is going to add significant support to the finance function, it is clearly not going to displace knowledge workers in the finance function in any meaningful way, by the end of the decade.
Shortage of talent
FSN research over the last 3 years confirms that finance headcount has plateaued. For example, any gains in management accounting are usually offset by a commensurate fall in financial accounting. Growing the headcount in the finance function is not seen as the answer to the finance function's challenges. Less than half of all finance functions (45%) believe a shortage of talent will hold them back. But that was before the full impact of the Great Resignation had been felt. With recruiters reporting that around 65% of employees are likely to look for a new job in the next year, plans for finance transformation and introducing new technologies could be blown off course. As it stands, 74% of organisations can only devote three months or less to finance transformation initiatives.
What senior finance functions professionals are saying, is that it is not a headcount issue that will act as a brake on progress, but not having the finance skills of the future on tap.
Skills needed for finance
The pandemic has ushered in a new wave of technological innovation and accounting data analytics. 90% of finance functions will be investing in forecasting technology right through to the end of the decade and this will be accompanied by growth in advanced accounting techniques, such as automated rolling forecasts, scenario planning and ultimately, predictive analytics.
These techniques will require financial data analytics skills, accompanied by well-rounded communication skills, e.g. finance business partnering skills. When asked about the key skills for finance to the end of the decade, respondents pointed to, data science, finance business partnering skills and systems accounting skills as their top three priorities. 73% went further by adding that they will be unable to meet their objectives without significant specialisation and up-skilling.
The challenges of talent management will be profound and seem set to define the competitiveness and agility of organisations for the foreseeable future. New technologies can alleviate some of the strain by supporting flexible working and a more fulfilling working environment. But smart CFOs know that upskilling will be a key differentiator, making the finance function more attractive to new hires and improving the competitiveness and agility of their organisations at the same time.
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Using her 15 years+ experience as a CA, Jordena helps Phocas develop financial products that save time and provide ways to extend analysis and performance.
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