Beyond the Numbers – More Than Ever, CFOs Need a Strategic Mindset
I don’t think anyone would doubt the importance of the CFO role (or at least I hope they wouldn’t!). But what many don’t understand is the magnitude of this role’s transformation over the past several years. It’s not just about financials. And it’s much more than tracking and compliance, as some may have thought. At the base of this transformation is an increased emphasis on having a strategic mindset.
Organizations are facing unprecedented challenges in supply chains, labor supplies, and overall skills gaps that must be rectified, or at least minimized, at every level and in every department. CFOs are plagued with the continued uncertainty these challenges bring, as they attempt to align the organization’s current and projected finances with the organization’s growth goals and strategies.
So, how can CFOs exceed expectations and sustain organizational growth? What separates the good ones from the great ones, especially in light of today’s challenges? What are the successful CFOs doing differently? Simply, they have the required financial acumen and leadership skills of most, but also a strong, developed strategic mindset.
Strategic Mindsets Lead to Success
CFOs look at the drivers of business growth to deliver both short-term financial gains and sustain long-term organizational growth. But to be successful at both requires a strategic mindset. In a recent Forbes article, a strategic mindset is listed as one of the top attributes of successful CFOs. “A strategic CFO understands that success tomorrow depends on creating the right financial structure today. The right person will work alongside the CEO to create a viable financial plan that will carry the business through future growth stages. This includes thinking several steps ahead to minimize risk.”
With a strategic mindset, CFOs often consider these types of questions:
How much cash do we need on hand at any given time?
How much should we have in reserves?
Where can we reduce costs?
What actions should we take to increase revenue? Short-term? Long-term?
Are our financial processes ready to scale? If not, what do we need to do so they are?
At what point will we be able to position ourselves for a merger or acquisition?
Seeing beyond the numbers to both the opportunities and risks that can only be found “in between the lines,” a successful CFO becomes a trusted strategic business advisor to the CEO. And a strong relationship between the two helps the financial and operational strategies stay aligned. “Strategic leadership from the CFO’s office in these scenarios can keep the company moving forward. When the chemistry between the CEO and CFO is right, their unique leadership traits will sharpen each other and work in tandem to get the best possible results for the company.”
As with much else in life, this comes down to strong relationships. Without the ability to communicate and collaborate effectively with others, a strategic mindset alone will never move the needle. We are at a time where everything in business is seemingly connected. Leaders can no longer operate in silos—there is simply too much at stake.
For example, the CFO should take that same strategic mindset to collaborate with the Chief Information Officer with respect to technological advances and data, with the Human Resources Director to manage the organization’s culture and employee experience, and the COO to decide where the most effective operational investments can be found. In this way, CFOs are about entirely more than the financials. In fact, they are the drivers of organizational transformation.
Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Over the past few years, we have learned that we are entirely more adaptable than we ever thought possible. We’ve learned that we can not only survive, but actually thrive in extreme disruption. And much of that adaptation and success is based on the ability to work remotely.
Today, remote work has become a priority for most employees … in some respect. In fact, in the 2022 Salary Guide from Robert Half, 75% of workers said they wanted to work at least part of the time remotely, and 34% said they would quit a company that didn’t allow remote work. And those who work in finance or accounting departments are no exception to these numbers.
While our new remote or hybrid workforce has been around for two years now, it is no longer about logistical prowess to achieve social distancing in a global pandemic. Rather, it’s about the reprioritization among us all that includes increased flexibility and enhanced employee experiences. And while these are incredible benefits for candidates and employees, CFOs and other leaders aren’t lacking in advantages either – namely, a massive widening of the talent pool.
In the same survey, 35% of finance and accounting leaders said they expanded their searches geographically to find the right candidates. Having employees across time zones also leads to the ancillary benefits of nearly automatically increasing the organization’s customer service, while helping with work-life balance at the same time. Consider an employee on the east coast who no longer has to solve a problem at 7:00 pm because they have a west-coast colleague who can easily take care of it within business hours.
Realizing our remote world is not going anywhere, CFOs are now considering how to revamp their recruiting and retention strategies around it. It’s no secret that competition is fierce. To successfully recruit top talent and keep them, they need to have structured strategies that have been adjusted to our new realities.
Recruiting When recruiting for finance or accounting positions, there are, of course, the “typical” qualifications and skills needed – certain degrees and designations, attention to detail, accuracy, confidentiality, ambition, embracing continuous learning, and problem-solving skills. That’s not changing. But now, more recruiting efforts are shifting to look not merely at the skills for the specific position or the necessary education and certifications, but the skills needed to work in a remote environment successfully.
To work remotely, CFOs need to look for candidates who can exhibit discipline, initiative, and the following abilities to:
be a self-starter,
work well without supervision, and
work well under pressure.
Additionally, by the very nature of remote work, they need to have more advanced technological skills or, at a minimum, be willing to learn them quickly.
Retention So much of retention is based on organizational culture – whether we are in-office or remote. And the flip side of the flexibility advantage that remote work provides to employees is isolation, especially when some employees are in the office and others are not. Remote workers could feel less appreciated or valued, or think that they will be passed over for opportunities since they are not directly in front of their leaders. They can also start to feel detached from their work and those with whom they work.
To ensure the organization has a people-first culture, these fears (real or perceived) must be minimized. Leaders should ensure remote workers are getting the time and attention needed – that they are acknowledged, promoted when justified, and provided equal opportunities to training, continuous learning, and resources, including access to the financial tools needed to do their jobs efficiently. Proactively sharing information, providing peer mentoring or coaching, and focusing on clear, timely communication, with opportunities for feedback are other helpful ways to keep them involved. Essentially, it comes down to the human connection, even when you aren’t physically together. Remember, technology is great, but alone, it will not build a culture your employees won’t want to leave.
Barker Associates provides strategic guidance to companies of all sizes. We provide the higher level of strategy your company needs to grow, especially as it relates to using the right strategies to keep your company running efficiently. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Inflation is About More than Higher Prices for CFOs
Go to any grocery store, restaurant, hotel, or gas station and it’s clear that 2022 is giving new meaning to the word inflation. In fact, inflation in the United States has soared to its highest point in 40 years. Between the supply chain disruptions, labor shortages, unprecedented government stimulus, and shifting consumer spending that have occurred around the world, and particularly in the United States, companies are feeling the crunch (and some may say, seeing the opportunity).
In Deloitte’s recent survey,CFO Signals™ , inflation was listed as a top concern for three-quarters of CFOs. And a vast majority, 76%, indicated that raising prices would be at least part of their response to offset increases in costs. This seems logical, of course, but there’s much more to it, with ramifications that can extend far beyond this year.
For CFOs, it’s not merely about paying more for products and services or raising prices in an attempt to counteract those increases, it’s about reprioritizing strategies in an incredibly volatile environment. Specifically, many will not only adjust prices, but also look for cost-saving opportunities and prioritize the sale of high profit margin products. While the uncertainty creates challenges, it can also create opportunities when the company is open to them.
There are a variety of strategies that CFOs can utilize. According to an article in CFODive, “[i]n addition to raising prices, companies are adjusting to higher inflation by cutting costs, negotiating with suppliers, diversifying their supply chains and relying more heavily on advanced technology such as data analytics.”
The strategy deployed will likely depend on the size of the business and how many products or services they offer, among other factors. For example, smaller and medium sized businesses haven’t been as willing to raise prices. They are more often on the forefront with their customers and, with regular interaction, are trying to keep prices the same for them. Yet, they are experiencing the drastic increase in their cost of goods sold, as well as their payroll to get top talent in this highly competitive market, just like everyone else. And if they don’t increase their prices, they may soon find themselves unable to keep up and out of business.
Additionally, most businesses have different profit margins for different products. It only makes sense to try to sell the higher profit items sooner rather than later. This can be accomplished in a number of ways from merely suggesting the other product to the customer or explaining that the original product will be delayed, but they have an alternative for it. Companies do this all the time to get the high-profit product out the door faster and by extension, get more money into the accounts faster.
Navigating the uncertainty around this extraordinary high inflation will be a priority for business planning in upcoming quarters. For CFOs, they must consider the following questions:
How long will the supply chain disruptions last?
How is consumer spending shifting?
How much are wages increasing?
After careful consideration of these questions, CFOs can analyze future scenarios (inflation levels out, continues to increase, or drops as drastically as it has risen) and develop strategies under each. They can then determine the impacts to operational strategy, human capital, supply chain, pricing, restructuring, real estate, and taxes for both the short and long term.
Barker Associates provides strategic guidance to companies of all sizes. We provide the higher level of strategy your company needs to grow, especially as it relates to the issues affecting the bottom line, such as inflation and the strategies used to combat it to keep your company running. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Credit Check – It’s National Credit Education Month
March is National Credit Education Month. If you’ve ever applied for a credit card or a car loan, you know the importance of having good credit. At its foundation, it demonstrates to a lender how likely it is that you will repay your debt on time. Having good credit benefits you in countless ways, while having bad credit can challenge you in just as many.
This month serves as an important reminder for us all to check our credit scores and implement tools and tips to help improve it, if need be. Overall, it’s about increasing our knowledge around credit, including the amount of debt we carry, the age of our credit history, reports to collection agencies, the effect of late payments, high interest, and hard inquiries, and the number of accounts we have.
While this monthly designation is focused on personal credit, both maintaining it and improving it, it also presents an ideal opportunity to look at the importance of business credit. Just as with personal, its significance lies in showing a lender your reliability in paying back debt on time. Simply, consistently monitoring the financial health of your business is a crucial part of running a successful business.
What is a Business Credit Score?
Similar to a personal credit score, a business credit score (also known as a commercial credit score) is the primary indicator of your business’s creditworthiness. It’s a number that indicates if a company is a good candidate for a loan or other extension of credit by vendors or partners. One difference from a personal credit score is the numbers themselves. Instead of the 300 to 850 on the personal side, a business credit score ranges from 0 to 100 and will be reported most often on Equifax, Experian, and Dun and Bradstreet.
To determine if your business is financially risky or stable, consider the following factors:
a company’s credit obligations;
repayment histories with lenders and suppliers;
any legal filings, such as tax liens, judgments, or bankruptcies;
how long the company has operated;
business type and size; and
repayment performance compared to that of similar companies.
Why is Business Credit so Important?
If a company wants to take out a loan to purchase equipment, lease property, or obtain better terms on a supplier contract, the lender/supplier will consider its business credit score. The lender will also consider the company’s revenue, profits, assets, liabilities, and collateral value of the equipment or property, if applicable. Essentially, you will need your profit and loss statement and balance sheet ready for review. In some instances, particularly with small businesses, lenders often check both business and personal credit.
Having good credit for your business will help you qualify for financing faster and easier to purchase an asset or help cash flow issues. It may also help you secure lower interest rates, saving you money over the life of the loan. Another benefit is the likelihood of getting better repayment terms with suppliers, helping your cash flow remain positive. Further, having a strong business credit score can help protect your personal credit score. Without business credit, lenders will have to rely on your personal credit. You should try to avoid this situation, if at all possible, as it increases your credit utilization ratio, and consequently, increases the likelihood of a negative impact on your personal credit. And if something happens with the business, it could take you years to fix it.
Five Steps for Establishing and Improving Your Business Credit
The following five steps can help establish and then improve your business credit score:
Open a business bank account
Open a business credit file (for example, on Dun & Bradstreet)
Get a business credit card
Establish a line of credit with your suppliers or vendors
Pay all of your bills on time
Barker Associates provides strategic guidance to companies of all sizes. While we provide the higher level of strategy your company needs to grow, we also never minimize the basics, including the importance of business credit. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Be the Most Positive Person in the Room From Leadership to Clients to Pitching Investors, Positivity Pays
We’ve experienced burnout and a mental health crisis like we’ve never seen before. Truthfully, we’ve had a rather bleak outlook for a long time. For business leaders and/or entrepreneurs, there are even more stressors. Not only do we have to worry about ourselves and our families, but also our teams, clients, and potential investors. Despite feeling like we’re stuck in a rut, we know there is power in positivity.
Contrary to what some may think, positivity is not the opposite of reality. You can be realistic, acknowledging challenges and struggles, without allowing them to diminish your attitude and deplete your energy. You can even be cautious, as long as it doesn’t slowly morph into pessimism.
American philosopher and psychologist William James once said, “Pessimism leads to weakness, optimism to power.” And what company doesn’t want to be powerful? As business leaders, we want to build strong companies, not weak ones. Positivity has the power to build energy and resilience, and improve decision-making. Simply, it has the power to create a stronger, more resilient company. Here are three ways you can be the most positive person in the room:
Positively Leading a Team
Positivity is a crucial component of leadership. No one wants to follow someone down a path of despair and despondency. Your team needs optimism. They need to feel encouraged and energized. And it is up to you to provide the impetus for those feelings. Remember, positivity is contagious (as is negativity).
There’s no doubt that it can be a struggle at times. It’s difficult to lead with positivity when you have mounting team challenges or are experiencing trying times. Here are a few tips:
Focus on resilience
Focus on what you can control
Stay calm and objective
Remember the importance of connections and relationships
Practice empathetic, active listening
Move quickly past failures
Celebrate small wins
Positivity when Working with a Difficult Client
We’ve all had clients who aren’t the easiest to work with. Maybe they’re pessimistic. Maybe they’re obsessed with control. Maybe they’re simply not nice people. However, if we focus on the strengths of the relationship, we begin to see more opportunities and less challenges. Listen to them and support their needs, where you can. Your positivity may even start to rub off on their rough exteriors. Through it all, ensure that you have boundaries firmly in place, so their negativity doesn’t start rubbing off on you.
Positively Pitching an Investor
Investors hear hundreds, if not thousands, of pitches. And if you want to stand out among all the rest, it will come down to your story and how you are telling it. When you are preparing to pitch, make sure optimism is woven throughout your story. Of course, you never want to forget about the importance of the numbers, but don’t be scared to humanize them with an exciting narrative or even a joke (where appropriate).
Yes, your nerves are probably rattling in your ears, your hands might be shaking, but try reversing your thought process. Instead of thinking about trying to win them over, think about them trying to win you over. And if you’re smiling and laughing a bit here and there, they’ll remember you long after you walk out the door.
In any scenario, one of the keys to being the most positive person in the room is gratitude. Be thankful for everything you have – the business, your team, those difficult clients, and investors and the opportunity to pitch them. Focusing on what you have and what you’re thankful for will only bring more positivity into your business … and your life.
Choose energy. Choose creativity and innovation. Choose positivity. Otherwise, you and your business may get left behind.
Barker Associates provides strategic guidance to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Remote CFOs – Is Success Really Possible? It’s All a Matter of Trust
More people are adjusting to the idea that our “new normal” includes remote work in some capacity. And this realization brings along new considerations, including which positions are better suited for remote work and the opportunity to attract additional top talent in various geographical areas. But when you’re talking about a leadership role, there are a number of other factors to consider, especially when that role is based in accountability and highly sensitive, confidential information, like a CFO. As such, many wonder if it is possible for a CFO to have success remotely.
As we all know, the CFO holds the top financial position of an organization. Some focus more on financial planning and strategies, while others focus more on budgeting, accounting, reporting, and risk management. In either case, the CFO ensures that the organization’s numbers fairly reflect its performance. Also, in either case, the foundation of the CFO role is relationships, which are generally viewed as stronger when individuals are physically together.
The key to working remotely is developing solid relationships with your direct reports. You need them to feel comfortable reaching out to you, as they would if you were in the same office. Previously, when we all worked together, you could see fear and anxiety in someone’s face and body language when they were nervous about something. It was palpable because, in large part, it was right in front of us. Now, we no longer have that ability, as it is far easier to hide nervous tendencies when you are in front of a computer camera. As the CFO, it is your responsibility to build trust in any situation, including when you are not physically present.
Remote CFO … In the Beginning
If this is a new role and you are just coming into an organization, spending one-on-one time with each team member is crucial in developing a strong foundation. If you do not live in the same area, that will essentially mean more travel in the early stages, but it will pay dividends in the long run. Simply, there is no better way to establish trust in a relationship than being face-to-face, sharing a cup of coffee (or your beverage of choice), and empathetically listening to the other person with whom you work.
In these meetings, learn their strengths and weaknesses, their aspirations, and their fears. Further, be abundantly clear about how and when you will be available when you are working remotely, as well as your expectations. Setting boundaries and clearly communicating them from the beginning will save you headaches down the road.
Building Trust as a Remote CFO
Continuing to incorporate relationship-building and trust as you perform your day-to-day responsibilities is key. Schedule weekly one-on-ones with your team and other stakeholders, and keep that time sacred. These meetings should be non-negotiable for anyone, including the CEO, to continue to build trust. One tip on virtual meetings is insisting on the use of cameras, despite everyone’s fatigue of them. Seeing the person with whom you are working, even though a camera, is better than not seeing them at all. Finally, when your team members reach out to you when you are not available, make sure you respond to them as soon as possible.
Another tip with virtual meetings is to be cognizant of differences in time zones. More than ever, you could be working with team members and clients across the globe. It is not always easy to accommodate others due to their various locations, but in your position as CFO, and to continue to garner trust, you must be flexible. If that means getting on a call at 5:00 am or 10:00 pm, that’s what you do. However, be nimble only where it counts. If other stakeholders or team members are reaching out to you off-hours (and time zone is a non-issue) regarding ordinary work activity, then put a stop to it immediately. Determine how to proactively communicate to them to keep it from happening again.
As always, boundaries are a key piece of trust, and they are never more important than with remote work when we are seemingly available at all times. Of course, if there is an emergency, all bets are off. In your position, you must answer that call and help find a solution. But be aware of the distinction between the two scenarios.
Your team members are not the only ones with whom you need to build trust. To build trust with other C Suite members, take time to understand their issues and challenges. For example, if you find out that an SVP is spending hours a month on a manual task that the accounting or IT department could easily automate, offer the solution, and help make their lives easier. These instances become huge wins all around, as you build stronger relationships within the organization.
More than ever, after a global pandemic and resulting economic crisis, organizations understand that a CFO is an investment and not an expense. And to have the best fit, that may mean hiring someone as a remote CFO. While this will require a different type of critical thinking and creativity in addition to the ordinary technical knowledge and risk mitigation skills of CFOs, many will find it more challenging and fulfilling. Their success is not only possible, but likely when trust is established from the beginning.
Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Shifting Five Thoughts for a More Strategic Mindset
We’ve talked about the transition workplaces are going through – from employees resigning in record numbers to the emphasis on employee experiences to the shift in hiring philosophies that prioritize skills over experience. Many employers are working diligently to fill the consequential gaps from those who left and advance those who stayed. And while those who are advancing are eager for the new challenge, the question begging an answer is – do they have the right strategic mindset to successfully transition into their new roles?
Becoming a strategic leader is about much more than the new title or position. It is about broadening the employee’s perspective from focusing exclusively on one area of expertise to focusing on the organization’s bigger, future picture. A strategic mindset simply cannot have a narrow focus.
Many avoid the transition from task oriented to strategy oriented when making this move. And it’s not that surprising. Task oriented roles and responsibilities are often more fulfilling in the day-to-day. There is instant gratification in many instances, as checking tasks off a list can be very satisfying. In contrast, you generally do not see the needle moving from a strategic perspective until months or even years later. And, as a society overall, we tend not to favor delayed gratification. However, to successfully make this transition, the strategic, broad, forward-thinking mindset must be embraced wholeheartedly.
Crossroads to Shift Your Thinking
For those who are at this crossroads, here are five shifts you can make today to begin having a more strategic mindset:
1. Think long-term instead of short-term. Instead of looking at your daily list and identifying what tasks you can cross off, think about the organization’s future. Ask yourself:
What are the possibilities for the future?
What are the opportunities available?
Where do we want to be as an organization in one year? What about in five years?
What can we do today to help us get there?
2. Think bigger rather than smaller. Think about how the tasks on those daily lists impact the company’s overall strategy. Are the things getting done today aligning to the company’s strategy and future plans? What are the long-term impacts of decisions that are being made and actions being taken today?
3. Think about opportunities instead of challenges. Some of the most innovative solutions (in any industry) have been brought about during tough times. It is only when we can no longer do the things we’ve always done that we begin to scratch the surface of alternative methods. And often, those alternatives open various new doors of opportunity that would have otherwise remained closed.
4. Think about future trends, not just the here and now. Join think tanks or find other resources that focus on market research. Ask yourself:
What is happening the industry?
What is happening in the marketplace overall?
How will the events and trends outside of the organization impact the organization’s future?
5. Think about spending time on strategic planning, not just current responsibilities. This is often the biggest challenge for leaders. As noted in a Harvard Business Review article, “How can you avoid getting overwhelmed by day-to-day tasks that feel so urgent, at the expense of game-changing initiatives that are truly important?”
Higher-level strategic thinking needs time, space, and dedicated focus. The most effective strategic leaders recognize this and block time on their calendars consistently to devote to strategic planning.
Cultivating a strategic mindset is crucial for those transitioning into a leadership role. It’s not always easy, but it is attainable by shifting these thoughts. Barker Associates provides strategic guidance to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
We’ve been inundated with various headlines regarding the Great Resignation. And while they all have different perspectives, one commonality exists – the value placed on employee experience. Employees are making it very clear that while money is important, it isn’t everything. They want to be valued and appreciated, and find meaning in their work and in those with whom they collaborate.
According to a recent Gallup survey, the percentage of engaged workers declined in 2021 for the first year in more than a decade, in large part because organizations have forgotten about the basics. “Among the engagement elements Gallup measures, the greatest declines were in clarity of expectations, having the right materials and equipment, and the opportunity for workers to do what they do best. These elements are foundational to employee engagement.”
For employers, prioritizing the employee experience has arguably never been as important as it is right now.
What Exactly is Employee Experience?
Think of the employee experience as a journey that includes every interaction and observation during an employee’s lifecycle with your company — from recruitment and onboarding to development and retention to exit. It encompasses all that they encounter and observe during that lifecycle, including their role, workspace, leader, team, and company culture. At their foundation, employee experiences should be aligned with the company’s purpose, values, and mission, and have the full support of leadership at every level.
Why Should You Care?
I don’t know of any leader who would object to decreased absenteeism, low turnover rates, or increased productivity. And these are all very valid reasons that every leader should care about employee experience. In fact, it should be given the same time, attention, and resources as launching a new product or service.
An enhanced employee experience results in increased engagement, a stronger company culture and brand, growth, and better customer service. Think of it this way – your employees are on the frontlines of customer experience, helping to build and represent your brand. And whether they have a positive or negative experience at work each day will invariably impact these crucial relationships, and by extension, your company.
Additionally, as we discussed in At the Intersection of the Great Resignation, Professional Services, and Those Who Stayed, the employees who did not join the Great Resignation are burnt out and often feel underappreciated. These employees, who have more leverage than ever before, could still choose to leave in search of something better, and that often means a better employee experience. However, if their leaders are proactive and look at this instead as an opportunity to enhance employee experience before it’s too late, those employees are more likely to stay. Simply, companies who place value on employee experience have a significant competitive advantage over others who don’t.
At the Intersection of the Great Resignation, Professional Services, and Those Who Stayed Shifting Perspective from Those Who Left to Those Who Remain
The Great Resignation of 2021 has left more than vacant seats … although it has left plenty of those too. In its wake are thousands of desperate CEOs and the often forgotten-about, frenzied, and burnt-out workers who chose to stay. In their desperation, what these CEOs aren’t realizing is that while they struggle with finding new talent in this overly saturated candidate market, they are often not paying enough attention to, or completely disregarding, those who are still right in front of them.
These employees, whether they stayed because they had no choice (after all, not everyone can quit), felt a sense of loyalty to the company and/or their co-workers, or simply loved their jobs, are now feeling undervalued and underappreciated at the same time they are working harder than ever. And, while they pick up the slack and feel underappreciated by their supervisors, they are often also dealing with increasingly demanding clients and customers. It’s as if the country is in the grips of a new pandemic of impatience, rudeness, and intolerance, and these employees are left to deal with it all. Additionally, the resulting shift in power and bargaining positions of the Great Resignation have forced companies to offer more money than ever before … to secure new talent. That’s great for them, but what about the others?
As it stands today, in return for all that they’ve done and sacrificed, these employees are getting depressed, having panic attacks, and getting sick, with some turning to alcohol or drugs to try to ease their physical, mental, and emotional exhaustion. With our nation already struggling with massive mental health issues, something must be done to curtail this destructive path.
The Impact to Professional Services
While this challenge has impacted nearly every industry, professional services, including accountants, lawyers, finance, and IT professionals exemplify it even more. The mental and emotional anguish of a professional who is trying to do a good job when it is physically impossible to do so (because they have too much work to do) takes away their ability to think clearly and make quality decisions. All accounting firms – from the Big 4 to regional companies – are short staffed. And the ones who stayed are having to work extra to cover multiple jobs. Despite this dynamic, it seems companies are reluctant to increase their salaries to meet current market demands. According to one recruiter, if you want an accounting professional work in the office, the rate will be 130% of the market because they are demanding to work from home.
Like millions of others, professionals are tired, burnt out, and frustrated. And money isn’t everything. The pandemic shook people to the core – they are looking for more meaning and know that meaning rarely comes in a paycheck. In fact, there are professionals walking out of jobs that pay $250,000 per year because they can no longer cope with the constant stress of doing everyone else’s jobs. That’s a lot of money to walk away from, demonstrating the increasing severity of this situation.
It’s About Retention
It’s incredibly short-sighted to keep working those employees who chose to stay to a breaking point, while keeping them at below market salaries. It’s time for employers to shift some of that focus from securing new talent to securing the talent they already have. If they don’t, they will never find the right balance, as those who chose to stay before will likely soon also leave. According to Harvard Business Review, “employers need to recognize that it takes significantly longer to recruit someone than it does for them to give their two-week notice and depart.”
Increasing retention can come in many forms, including:
Providing opportunities to grow
Elevating the company’s purpose (and communicating it with the team)
Prioritizing culture and connection
Investing in taking care of employees and their families
Further, while we are at a time when there is increasing emphasis on Environmental, Social, and Governance (ESG), we cannot decrease emphasis on the health and welfare of our employees. It is counterintuitive to work on ESG initiatives while the company is short-staffed and burning out the employees they have.
A word of advice …
For Professionals. Know your worth! Do your research and ask for a raise with your current employer or seek a new position in this market to increase your salary.
For CEOs. Retain the talent you already have by treating them well! Pay more attention to the professionals you already have on staff than those you are attempting to get on staff.
The Great Resignation may have been considered empowering for those who were taking a stand, demanding more, and walking out the door. But for those chose to stay, it has been anything but empowering. And the resentment and exhaustion they feel isn’t going away anytime soon. It’s time for decisive action now to retain those who remain.
Barker Associates has extensive experience as an outsourced CFO. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
Unwrapping the Top Three Overlooked CFO Year-End Processes
The holidays are upon us. And while we all may enjoy the traditions, family time, gift-giving, and merriment (likely even more so this year), there is still work to be done … particularly for CFOs. It’s time for year-end analyses and processes to end 2021 in an organized, balanced way in order to start 2022 with a clean slate. While it can all be overwhelming at times thinking about reviewing operations, marketing expenses, and all financials, it’s imperative these responsibilities are met accurately.
Unpredictability Doesn’t Change the Basics of Financial Planning
With all its tasks and checklists, end-of-the-year financial analyses and planning comes down to the assumption that when you evaluate where you were, you can better understand where you’re going. However, the past nearly two years has made this assumption somewhat unreliable with unpredictability appearing to be the only thing that’s predictable in business.
Despite this volatility though, CFOs ultimately remain responsible for performing the same duties – analyzing financial reporting, balancing accounts, preparing records and documents to file and pay taxes, and creating budgets. These tasks remain stagnant regardless of outside economic factors. But it has never been more important to dig deeper into some additional, often overlooked, processes.
Top Three Overlooked Year-End Processes
For many, we think CFO and Year-End and we automatically think financial statements, balancing accounts, and preparing for tax returns and payroll reports, but there’s so much more. The end of the year presents a unique time to unwrap real opportunities. Whether its negotiating with vendors, securing investments, or looking for better deals with health insurance, in some instances, you can start over in the new year, advancing your company even further (not to mention faster).
So, before you start the countdown to midnight, readying yourself for all that the new year has to offer, make sure you count the top three overlooked CFO processes so that your company is just as ready for 2022.
1. Accounts Payable. Sure, we remember to look at accounts receivable – our team has worked diligently, and we need to collect the money owed for that work. But what about what we owe?
Analyzing the company’s Accounts Payable is not merely a process to get caught up on payments though (although that is also clearly crucial). Rather, it is also an opportunity to review vendor contracts and negotiate better terms in an attempt to save money in the new year.
Are there any other options?
Are there hidden cost savings?
What does the competition look like?
If the CFO doesn’t look at ways to save the company money, no one else will.
2. Financial Technology. Technology has perhaps never been as important as it has been recently. Technology is what kept businesses running and team members connected when they couldn’t physically be together during a global pandemic. And yes, from an expense perspective, you’re likely spending more on it than ever before. But are you also considering what financial technology you are using? Are you asking yourself –
Is it up to date?
Have we switched over to the cloud, where there are automatic backups?
What does your accountant use and prefer?
If not, you probably should. This is a great time to do an end-of-year financial technology audit.
3. Future Scenario Planning. You may be saying, “Of course, we take time to strategically plan out the year,” and I’m sure you do, but things are different now. Knowing the challenges unpredictability creates in successfully running a company, it’s crucial to expand this planning by using future scenarios. Essentially, you create different scenarios and develop the response or plan of action for that particular set of circumstances. While this type of planning was historically the foundation of crisis management, with crisis permeating every aspect of business, it plays a more prominent role in day-to-day strategy.
With future scenario planning, you define triggers in advance and commit to be flexible and nimble enough to account for them. For example, a common future scenario planning topic this year is PPP forgiveness. For those who do not know yet if their PPP loan has been forgiven, future scenarios include full forgiveness, partial forgiveness, and no forgiveness. Analyzing how each of these scenarios will affect your business next year is key to unlocking future success.
Barker Associates has extensive experience in year-end processes and planning. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.