The economic sphere has, in recent times, undergone significant changes. Automation and Artificial Intelligence are rapidly evolving the modern workplace while a changing economic climate has forced organizations to proactively respond to such changes. Job roles are getting restructured and skillset demands are shifting. It is in such times that the ACCA - People Matters Study on Developing Finance Talent attempts to assess the state of finance talent in India.

The aim of the study is to understand how the role of finance teams is evolving. The finance function has traditionally been the backbone of modern day organizations. Its unique and wide-ranging impact stems from the need to make cost-effective decisions across functions, irrespective of the size of the company. However, in light of technological innovations, regulatory changes and disruptive business environments, finance and accounting teams today need to redefine their traditional operating models.

Attempting to gauge how the finance function has evolved, the study consists of both in-depth perspectives from prominent HR leaders within the finance space and a survey that has sought to assess larger trends that are shaping the future of finance teams. The study captures some of the key finance priorities over the next 12-18 months and sheds light on some of the key changes that HR professionals feel are necessary to meet such priorities.

Key Findings

Trend One: Designing learning initiatives, retaining top talent, and building the digital quotient remain key priorities for the next 12-18 months

Given the nature of constant change that organizations find themselves to be a part of today, talent priorities need to be reflective of such changes. When it comes to the finance function, the survey found a similar trend.

Key talent priorities like designing learning initiatives aimed at keeping the skills up to date to match evolving talent demands emerged as one of the top talent priorities in the next 12-18 months as over 59 percent of the total respondents highlighted this being at the very top of their agenda. This was followed by two key concerns which have become extremely relevant in today’s world: retaining top talent (51 percent) and building the digital proficiency of modern day finance teams (41 percent).

While factors reflective of a changing business environment featured as most prevalent talent priorities, finalizing compensation models for the finance team and improving the assessment process during hiring appeared to be less of an urgent imperative. Only 17 percent and 25 percent of respondents opted for these respective options as their top talent priorities for next year. This suggests a cautious approach on the part of business leaders and HR practitioners to avoid tinkering with systems and models that have already been established, instead prioritizing response to market changes more. The importance of continuous learning and ensuring its proper access is an effective way to deal positively with external changes. HR professionals have also highlighted the need for a well-defined talent strategy and many preferred a quarterly meeting with their finance teams to ensure companies are able to proactively deal with shifts in talent demands. The ACCA - People Matters Study on Developing Finance Talent reached out to over 80 respondents, most of whom were HR professionals across various sectors.

Trend Two: The essential need for a true talent strategy

Having a well-defined talent strategy that will guide the growth of finance teams within the organization has become ever more critical today. The survey found that 61 percent of respondents comprising of both HR leaders and heads of finance departments believe in the fundamental requirement to deploy a well-defined talent strategy as a means for finance teams to demonstrate stronger impact. Less than 30 percent of respondents said that having a well-defined strategy is just a “good to have” when it comes to finance teams, and only 10 percent believed a talent strategy wasn’t really a focus area for their finance teams.

Coming to the preferred periodicity of HR professionals meeting with finance leaders to share and discuss such talent strategies, the survey revealed two different preferred frequencies. Around 29 percent of respondents chose to meet their finance leaders every quarter, which was closely followed by 23 percent of respondents who said their meetings were conducted annually.

Delving further into the development process of talent management strategies for the finance teams, the study also intended to assess which function was responsible to help their finance teams chart a journey to greater impact and efficacy. The survey revealed that 58 percent of the companies interviewed, the responsibility lay with the HR function while 29 percent suggested it was the Finance team that were themselves responsible for their talent management strategies.

Trend Three: The importance of learning initiatives has risen

In order to understand where companies stand on providing career development opportunities, the research survey questioned the respondents on whether their companies had a well-defined competency model for their finance teams. The results revealed an almost equal percentage of companies with such models to those without such models. A similar trend was followed when it came to having a defined career development plan for their respective finance teams.

In terms of undertaking learning programmes, around 36 percent of the respondents said that they were implementing well-defined individual learning and development plans which provide employees with personalized learning programs. This was followed by 25 percent of the companies surveyed who said they have an organizational framework to provide L&D opportunities to their finance talent, out of which a significant proportion (65 percent) of companies had over 200 employees working within their finance and accounts department.

The study also explored the preferred learning methodologies that companies follow to train their finance talent. On-the-job coaching and mentoring programmes emerged as the most preferred option followed by experiential and simulation-based training and professional qualifications. Surprisingly, online training emerged as the least preferred option.

Trend Four: Effective governance, risk identification, and proper ethical judgment emerge as the most desired skills

The changing nature of external markets has made skill demands volatile. The top three desired skills in a finance team today according to the survey are proper judgment to ensure appropriate ethical professional behavior (Ethics and Professionalism); an effective and appropriate governance abilities to ensure a, regular oversight with focus on risk identification (Governance, Risk and Control); effective business reporting skills (Corporate and Business Reporting).

The survey noted that skills with the largest gap in current vs desired levels were the ones that have become more relevant today. Those include managing stakeholder relationships, contributing to strategic planning and maintaining tight performance management systems, along with the ability to find new avenues of innovation*. Although such skills are almost as desired as the top three skills for modern day finance teams, the gaps remain more significant and that their current levels are some of the lowest at present.

Finance teams have traditionally been required to ensure compliance with government statutes and laws while ensuring strong financial control. But today, in the age of automation and AI, teams have to do more than just that. The survey reflects the need for companies and finance teams to move beyond traditional roles focusing on insight and decision support for the business.

Trend Five: Key Challenges

Businesses currently operate in a world of rapid transition; one that has been defined as the Fourth Industrial Revolution (Klaus Schwab, Founder and Executive Chairman of The World Economic Forum). In response, building the right finance team isn’t always that easy.

The top business challenges with respect to developing finance teams relate to learning and building skills. 76 percent conceded that encouraging their own finance teams to commit and engage responsibly to continuously learn and develop is one of the biggest challenges they face. Finding the right external partners for developing the skills of their finance teams was the second most prevalent challenge that respondents highlighted, with 38 percent of the respondents seeing as a major problem. The third major challenge highlighted by respondents related to a lack of finance knowledge on the part of HR teams to actually deliver relevant learning and development options for Finance. Budgetary constraints were identified as the lowest challenges facing HR professionals in developing finance teams in the coming year.

Conclusion

The ACCA - People Matters Study on Developing Finance Talent sought to assess some of the aspirations and challenges that HR professionals foresaw when it came to developing finance teams. The study results have highlighted some important shifts in how finance talent is being hired, developed, and retained within companies. In addition, the study also highlights skillset shifts within the function and sheds light on the increasing importance of learning programs and leadership buy-in to ensure finance teams are well equipped to be effective business partners.