Chances are, when I’m not at my day job or with my family, you can find me at my favorite Bay Area wine shop. Before you judge, let me clarify that I am part owner of this particular shop.
Spending my time there, interacting with people of all ages, has validated something for me: Millennials are more willing than any other generation to move on to new opportunities if they don’t feel fulfilled.
As the CFO for a major company, I’ve been thinking about this a lot — mainly because the finance function is changing. It is no longer just about reporting and balancing books, but about shaping a company’s strategy and driving business outcomes.
And in order for the function to continue to evolve, we simply must attract and retain talent. Unfortunately for us, the right talent is in short supply.
Why is there a finance skills gap?
Today, only 33% of CEOs are willing to give their CFOs a passing grade for talent management. In addition, 70% of financial services CEOs are concerned about the availability of key skills in their industry. Why is this happening?
It’s a collection of reasons, but I’ll narrow them down to one: finance’s changing role in business — specifically, finance’s ability to drive business outcomes rather than simply report them.
This is thanks to the increasing capabilities of digital technology and the emergence of new roles in finance: data scientist, market maker, and social and behavioral scientist. Unfortunately for us, there just aren’t that many behavioral scientists out there well-versed in finance, or vice versa. There’s also a general skills gap when it comes to these jobs. According to a report by McKinsey, there could be a need for 736,000 data scientists in 2024, but estimates point to there being only 483,000 in the workforce by then.
Adding to this, people in finance today — especially finance leaders — are expected to be well-versed in soft skills like communications and leadership. One 2015 survey of financial professionals found that two of the top three skills most lacking among entry-level talent were non-technical skills: leadership, strategic thinking, and execution.
As finance’s importance to the business grows, so too will its importance in guiding strategic decisions. Finance has a seat at the table. That seat requires the ability to collaborate, relationship-build, and lead.
Three solutions for the finance community
Responsibility for solving this problem rests on the shoulders of those of us in the finance community. We need to take the following three steps to boost our pipeline of qualified, smart young talent:
Above all else, the action I’d take first would be to automate. I don’t mean to automate entry-level positions. Instead, I mean automate the menial and boring tasks so your entry-level employees can work on more meaningful tasks.
Take the exceptionally mundane task of budgeting. There’s no reason this should be a manual process done on spreadsheets. The times have changed, and so has the field of finance. Automate and give your younger talent meaningful work — something that will make them feel like they’re having an impact.
2. Empower and entrust
We as finance leaders need to ensure that we’re empowering and entrusting our employees. Given how finance is changing, we need to do everything in our power to set up our employees for success. This involves instituting the right kinds of training and creating an environment where risk-taking is encouraged.
Finance used to be a field constrained by monotony and processes. No longer. What we need are new ideas and new ways of doing old things.
If your team is pushing to acquire new technology, hear them out. If a young hire recognizes an inefficiency, listen. And just as important, make sure they feel empowered enough to voice their opinions in the first place. Culture is shaped at the top, and building confidence is one of the surest ways to help develop those soft skills so desperately needed today.
Engagement is crucial. Your employees need to feel like they’re part of the team — that they’re part of something more than a 9-to-5 day.
Not only are millennials likely to seek new opportunities if the work they do doesn’t fulfill them; they are less likely than previous generations to “pay their dues” doing transactional work. In today’s market, they can make those choices. The rise of the gig economy is a testament to that fact.
Today, people can make a living by providing a service online or through an app. In fact, 43% of the American workforce is expected to be freelance by 2020. Millennials are entering a workforce where short-term gigs that don’t provide benefits are growing in popularity. They’re simply responding accordingly.
To retain your young talent, do the opposite of the gig economy. Show them you appreciate them. Make them feel like they’re valued.
Finance is not the same field I entered two decades ago. As finance leaders, we have two choices. For one, we can meet the change and challenges we’re facing head-on, and do everything in our power to best prepare our organization and today’s early talent for the job at hand. Or we can grumble and hope things change. I’ll close with a quick word of advice: Only one of these is a winning strategy.
- How to Retain Young Finance Pros
- The Holes in Human Capital Metrics
- How CFOs Can Stop The Exodus Of Young Talent
This article originally appeared on CFO.com and is republished by permission.