Keeping up with new technologies and new compliance obligations are two of the greatest pressures finance leaders face, according to the results of a recent Robert Half Management Resources survey. This is driving private companies to change the way they get work done so they can more effectively address these and other pressures. This includes adopting new staffing strategies, scaling their teams, and bringing in resources with specific, project-related skills when they need them. In short, the pressures are forcing finance leaders to rethink the traditional finance labor model.
Historically, finance and accounting teams worked harder and longer when workloads peaked, but they also sometimes sat around doing nothing when business got slow. It was hard for leaders to maintain optimum staffing — or even know what optimum staffing levels are — as demands changed. Then, when specialized needs arose, finance leaders relied on the skills of the people they had on hand. As new situations — new regulations, mergers or acquisitions, financial software implementations, expansion into new markets, and the like — required new skills, the people already on salary did their best and stretched themselves to fulfill new skill requirements.
While that approach may have worked in the past, its continued effectiveness is constrained by the increasing complexities of today’s marketplace. The traditional staffing models are giving way, partly due to greater worker mobility in an on-demand economy. This change is providing new opportunities for adaptable, entrepreneurial people to participate as members of a collaborative professional core, or to operate as free agents who apply their specialized skills to tasks and projects as needed. It is also providing finance leaders with the ability to change the skill mix or scale teams up or down to respond to changing business conditions. In essence, the trend is toward a flexible labor model that offers win-win opportunities for everyone.
Many private companies are discovering the shamrock organization model, first described by management author Charles Handy in 1989. Organizations adopting this model are enjoying greater flexibility and agility by using a blended team of various types of resources. The model helps leaders avoid over-hiring or unduly burdening employees. It also provides ready access to experts who can address particular short-term needs or tackle complex, unique and one-off situations.
The blended team consisting of salaried resources working side-by-side with contractual staff and specialized consultants not only reduces the burden and stress on the salaried team, but also facilitates skill transfer among resources and enables rapid revision to team composition as events demand. The specialized resources that become part of this flexible model can even spur digital transformation as often the skilled resources assisting with compliance efforts would be versed in the latest compliance technologies (robotic process automation and artificial intelligence among them). In today’s tight labor market, those resources are in high demand and may be difficult to hire and retain, or do so at a reasonable cost.
Working with a trusted external partner provides access to the specialized skills that are needed to address finance leaders’ challenges or open up the opportunities mentioned. That same partner can help manage the organizational changes associated with new technology implementations and compliance remediation efforts. Finance leaders will want to cultivate trusted external partners who can develop deep and nuanced knowledge of their organizations’ people, processes, technology and culture, and confer on staffing strategy. The ideal partner will have ready access to the three labor pools — professional core, contractual fringe and flexible labor force — to bring in the resources private companies need, when they need them.
If private companies are not properly equipped with the appropriate skill mix, then finance leaders’ two greatest pressures — keeping up with new technologies and new compliance obligations — have the potential to impose opportunity costs, disrupt operational functions and resources even beyond the finance department, and affect companies’ ability to adapt quickly to shifting business needs. A partner who comes to know a company’s operations inside and out, on the other hand, can help avoid this undesirable outcome, and provide strategic input, institutional expertise and continuity to deliver maximum value over the long term.