Many of the CFOs I meet are worried and disheartened about the exodus of young millennials from the profession—and for good reason. These talented young professionals have both the skills and the desire to spearhead finance’s needed evolution from looking at yesterday to planning for tomorrow. This outflow of talent is a lose/lose situation. Those leaving lose the opportunity to advance in a profession that holds great promise, and corporations lose both the talent and the costly investment they have made in them.
It’s nothing new for early-career finance talent to abandon the profession. I speak from personal experience. My career began with 18 to 20 months of management training, rotating through international assignments throughout a Fortune 500 company. It was fun and exciting. Then we newcomers settled into our actual roles: tedious transactional accounting work. Within a year, only about 10 of us were left from the original 36 who started. Most migrated out of finance to other professions.
The young people I meet today are highly motivated; they want to have an impact. But they are stuck with correcting accounting problems and data gathering instead of learning the skills they’ll need to solve future problems. The churn rate is 15% to 20%.
Capitalizing on youthful enthusiasm
The reality is that we can eliminate wasted, useless work through automation: business networks for procurement, machine learning, software that supports financial close, and so on. At SAP, we have seen exactly as we have shifted that talent to doing things that can help the business change – working on new billing structures and more complex contracts, for instance.
Here’s an example. When I was the SAP CFO in Latin America several years ago, we had a number of young professionals under the age of 30, and wanted to keep them engaged. We made transparent the difference between management reports and statutory reporting, and had them work on analyzing how decisions that helped the management books could actually have negative effects on statutory results and cash flow.
The results were incredible: tens of millions of dollars in cash-flow improvement, favorable tax impacts, and balance-sheet cleanups. I was so impressed that they did this on their own time, working crazy long hours and making personal sacrifices. And they were so incredibly proud that they could show business leaders how the finance team was adding value.
Rethinking our own paradigm
But I think CFOs are starting to better understand the frustration of young people in the field, whose expectations are dashed as they are sentenced to years of mind-numbing work before being given a chance to make a meaningful contribution. At a recent meeting, I heard CFOs expressing the importance of changing their own mindset if they are going to stop the hemorrhaging of talent.
They are beginning to understand the need to abandon the “rite of induction” mentality, that the way you learn is through painful, mind-numbing account reconciliation work—and whoever can take the most pain for the longest time survives. Creating opportunities for young professionals has to start early.
And we need to take another look at how we educate them. It’s essential to ensure that finance professionals develop a firm grasp of the cornerstones of the profession—accounting rules, balance sheets, cash flows, and P&L—while helping them focus their skills where they are most needed in an increasingly complex business environment.
This article originally appeared in Global Banking and Finance Review Magazine. It is republished by permission.
For further reading about the trends affecting the finance profession, check out the CFO Research report, Thriving in the Digital Economy: The Innovative Finance Function. Understand the 9 trends shaping the future of the finance profession, and the 5 actions finance professionals can take to be ready. CFO Research surveyed 1,500+ finance professionals to find out how their careers are changing in the digital economy.