The long-term talent crunch and “great resignation” that the pandemic only exacerbated require CFOs and their executive colleagues to ensure business and workforce management strategies operate in lockstep.
The vast majority of workforces demonstrated unparalleled resilience and flexibility during the global pandemic. The most valuable organizational asset—people—shined while executing a massive mobilization in transitioning to remote and hybrid work in the face of personal COVID-19 challenges. This display of adaptability was impressive because it effected change in a matter of days in areas that took months and even years to accomplish prior to the pandemic. It set the bar, which now places pressure on organizations to meet their workforce’s newfound desire for greater flexibility in the post-pandemic era. After all, if remote work has been productive, why the rush to return to the office?
Amid the trends toward some form of a hybrid “new normal” workplace, CFOs face a couple of specific talent management challenges within the finance function. First, many finance chiefs need to update an “old school” mindset by rethinking their responses to tight labor markets as well as their talent acquisition strategy. Second, CFOs should embrace a more expansive approach to managing—and recalibrating as needed—their organization’s talent management investments. This means adding talent management to the growing number of areas CFOs help shape while driving corporate strategy.
Business leaders cannot expect to achieve their strategic objectives without the talent and skills required to meet those objectives. Assuming business goals require a robust talent pool, remote and hybrid working arrangements should be part of the organization’s talent strategy. These approaches dramatically increase the scope and reach of workforce planning, recruiting and talent sourcing efforts. Remote work is not always an option, of course—for example, manufacturers typically need workers on-site. Although this restricts recruiting to a smaller geographic area, other elements of the employee experience—the availability of tools and technologies that make work easier, career development opportunities, leadership development and training, and more—will help that manufacturer recruit, retain and develop workers better than competitors do.
While most organizations set forth highly innovative and aggressive business objectives around initiatives such as customer experience, innovation and transformation, fewer leadership teams devise talent strategies with similar levels of creativity or audacity. Executing bold business objectives, in fact, requires having the right talent and skills in place. This, in turn, requires a broader portfolio of innovative talent management models, approaches and thinking. CFOs play a central role in helping devise and implement these elements.
CFOs can start elevating the importance of this work in the organization by taking a hard look at their own mindset. Take views on compensation, for example. If you think paying people more is the only way to attract and retain top talent in a tight labor market, think again. Salaries and benefits represent only one of the many components of talent management that require consideration and investment.
Similar to CFOs in managing their finance organizations, chief human resources officers (CHROs) demonstrated remarkable flexibility and ingenuity in response to pandemic-related challenges. In recent years, HR leaders have intensified their attention to the physical, emotional and social well-being of employees in addition to sustaining their longstanding focus on salaries and benefits. This shift is evident in the emergence of HR roles such as “director of well-being,” a growing emphasis on developing a culture of care for employees and the widespread drive to foster a differentiated employee experience.
For decades, CHROs and talent leaders have advocated for a seat at the executive decision-making table. The pandemic, combined with the persistent talent shortage, ensures that the seat is theirs. Yet long-term, their performance and success will depend in great part on the quality and depth of collaboration with their CFO colleagues, who are essential to help driving needed changes and improvements in talent management. The following four areas will not only make or break CFO-CHRO partnerships but also will help determine the efficacy of the organization’s talent management strategy:
- Upskilling as well as retention: Upskilling is needed to get employees proficient in automation in all its forms, along with artificial intelligence, quantum computing and other emerging technological advancements. Yet the line between upskilling and retention has blurred. Without sufficient, commensurate attention to employee engagement and retention with a focus on the attributes that attract talent and differentiate the workplace, employees may hop to other competitors after their organization makes significant investments in their training and development.
- The contingent workforce: Rather than relegating contingent workers to discrete projects and task-based assignments, leading organizations leverage this extended workforce to achieve more strategic returns, including the development of new capabilities. HR leaders also invest more thought, effort and funding in designing and supporting how contingent workers become part of the workplace culture. In addition to optimizing their contingent workforce management, high-performing companies leverage full-time employees, expert external consultants, and managed services and outsourcing providers to respond to external disruptions with greater speed and agility.
- Succession planning: This has become crucial now that workers ages 55 and over are the most likely age cohort to leave the workforce, yet relatively few organizations or functions are treating succession planning as a strategic priority beyond the senior executive suite. Devising and testing knowledge transfer processes and leadership development plans prior to losing senior leaders and professionals reduces the high costs and stress associated with reassigning roles and responsibilities in a reactive manner following unexpected departures.
- Real estate: Amid the move to various forms of hybrid work models, more companies are deploying highly configurable office real estate assets to conduct a range of activities designed to build teams, spark connections and innovations, strengthen retention, and enhance the resilience and value of their organizational cultures. CFOs can play a central role in rethinking the post-pandemic office—a high cost in most operating budgets—by partnering with CHROs to conduct a fundamental evaluation of the value of physical office locations.
Optimizing the way organizations manage each of these areas requires the right blend of HR and finance expertise. HR leaders focus on all of the drivers of employee experience—physical, emotional, social and financial—that foster the organizational culture and deliver recruiting and retention benefits. CFOs should determine whether the talent strategy aligns with, and enables, the business strategy while ensuring each talent management lever HR pulls is sufficiently funded, measured and monitored.
This type of finance-HR alignment also will help quantify the soaring financial impacts of having the right—or wrong—talent in place.
This article originally appeared on Forbes CFO Network.