DigitalCFO Newsroom | 11 November 2021
Research from BlackLine suggests Finance and Accounting is struggling to keep up with
the pace of digital transformation across the wider business
A global survey of C-suite executives and finance professionals commissioned by BlackLine, Inc. (Nasdaq: BL), a leading provider of financial controls and automation software, has revealed that just 3% of CFOs in Singapore are confident that their finance function has the skills required to help their organization grow and adapt over the next five years. This is lower than the global figure of 14%. Furthermore, more than a third (35%) of C-suite respondents here believe Finance and Accounting (F&A) is failing to keep up with other areas of the business when it comes to digital transformation.
The survey of 1,150 business leaders and finance professionals (conducted by independent research agency Censuswide across the US, UK, Germany, France, Singapore and Australia) suggests that talent acquisition and retention are high on the C-suite’s agenda as companies seek to implement more aggressive growth strategies post-pandemic. However, it also identifies a major skills gap that threatens F&A’s ability to provide the consultancy, analysis, planning and due diligence required to support these broader business goals.
New Generation of Talent Critical for Growth
With almost a third of C-suite respondents (32%) saying they are planning to focus more on international markets for growth and acquisitions and 24% planning to be more aggressive when it comes to acquisitive growth over the next 12 months, skills will be critical. Many C-suite executives plan to invest heavily in talent with about a third of these respondents (36%) focusing on developing existing talent from within, and a similar number (35%) on new talent acquisition at a leadership level to drive post-pandemic recovery and growth.
The Finance Challenge
The research showed that skills and growth are particular concerns for CFOs. When asked what their most pressing business concerns are for the next five years, many CFOs (42%) said maintaining a robust balance sheet is their number one priority and 39% mentioned finding opportunities for organic growth. This concern is likely being driven by a shortage of people with finance and accounting knowledge, something that was acknowledged by more than half of CFO respondents (52%), and ability to retain the right talent (45%).
The Post-Pandemic Skills Gap: Need for Talent With Concurrent Tech and Business Skills
When asked about the skills their organization currently has within the finance function, both C-suite executives and finance professionals highlighted a number of vital gaps. 44% of respondents said that not everyone in their finance team has the broad business leadership knowledge or skills required today. 39% said that not everyone in their finance team has the skills to help with more strategic work (like analysis and planning).
52% of CFOs said they do not currently have enough people with software and technology experience within the finance function. Furthermore, when asked what the biggest challenge is for recruiting future F&A talent, about a quarter (25%) of overall respondents noted that it is difficult to find candidates with both technology and F&A skills.
“It’s encouraging to see many companies prioritizing growth and that business leaders are planning to pursue ambitious strategies to make this happen. We’re in a period of reopening and economic recovery. This makes it vital for the finance function, which lies at the heart of business, to be appropriately skilled to address the many challenges ahead,” said BlackLine Senior Vice President for Asia Pacific, Terry Smagh. “At the heart of it, business leaders must ensure we retain and develop the people we have and are also in a position to attract the best the market has to offer. While this can be challenging as shown in the survey, we believe there are solutions to help tackle this issue.”
The Way Forward
Responses suggest there are a number of areas businesses could invest in to help solve this modern-day skills gap, including updating outdated technology or processes. The importance of addressing these issues is clear, with more than a third of C-suites and finance professionals (34%) saying legacy technology and processes at their organization make it difficult to attract the best candidates. In fact, legacy technology and processes were seen as more of a challenge for recruitment than being able to offer a competitive salary (25%). Other challenges and opportunities identified include:
- The need to reduce transactional, mundane work. When asked about the biggest negative impact on finance employee retention the top three issues were: a lack of opportunities to develop new skills because transactional work takes up so much time (27%); career development and upskilling are not priority in the organization (27%); and a lack of flexible working options (25%).
- Addressing outdated perceptions of F&A roles that make it challenging to recruit good candidates. When asked what stops people from starting a career, the perception of F&A being a siloed function without any inter-department collaboration opportunities was identified as the main reason by both C-suite execs and finance professionals (49%). This was followed by the perception that F&A roles require a lot of time-consuming, manual work (39%).
- Revising traditional educational pathways that young F&A candidates tend to follow, as well as ensuring they have experience with modern accounting technology. 27% of C-suite and F&A professionals believe academic courses need to focus more on technology skills. 30% of the same respondents shared that most people do not have enough experience with modern accounting technology at the start of their career.
Mr. Smagh continued: “Finding people with the right technology and F&A skills seems to be at the crux of the issue. We need to reevaluate tools, training and development, in addition to the perceived role that F&A plays within the business, to attract the best and brightest finance talent moving forward. Delivery of business growth as opposed to pure survival will be dependent upon building a finance function that is as technology literate as it is financially literate. People need to be freed from the mundane and given the space to focus on strategic business insight and value.”
More information, including a detailed whitepaper on the research, can be found here.