# The evolving role of the CFO: money isn’t everything
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-10-27
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: The Strategic Role of CFOs in Talent Management and Acquisition
Meta Description: Discover the crucial role of CFOs in shaping HR strategy and driving business performance in a changing workforce landscape. Learn more in this insightful
URL: https://financedigest.com/the-evolving-role-of-the-cfo-money-isnt-everythinghtml

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By **Liam Butler,** VP Sales EMEA at SumTotal

The recession forced the Chief Finance Officer (CFO) and finance to step up to the plate.By helping businesses restructure their organisations, manage risk vs. cost, curb unnecessary expenditure, balance the books and ensure healthy cash flow, finance proved its mettle during the toughest times. In the growth [economy since](https://www.financedigest.com/uk-economy-shrank-record-11-in-2020-worst-since-1709.html "UK economy shrank record 11% in 2020, worst since 1709"), this role has done anything but retracted and now is front and centre of driving strategic business decisions.

CFOssit at the intersection of productivity, expenditure, investment, and innovation. In fact, they are considered the performance accelerator in many businesses. The [key tenants of the CFO’s proposition when it comes to talent management](https://www.financedigest.com/energy-management-system-market-2021-by-global-key-players-types-applications-countries-industry-size-and-forecast-to-2025.html "Energy Management System Market 2021 by Global Key Players, Types, Applications, Countries, Industry Size and Forecast to 2025") and acquisition are their strong financial modelling and analytical skills. These skills lend themselves to a holistic organisational perspective made through an assessment of data, positioning CFOs as an ideal candidate to help the organisation [drive a more effective HR strategy](https://www.financedigest.com/impact-com-partners-with-norsk-tipping-to-drive-a-sophisticated-partnership-strategy.html "impact.com partners with Norsk Tipping to drive a sophisticated partnership strategy").

This is reflected in a [recent EY CFO report](https://www.financedigest.com/most-recent-development-report-on-centrifugal-chiller-market-to-witness-exponential-rise-in-revenue-share-during-the-forecast-period-2021-2031.html "Most Recent Development Report On Centrifugal Chiller Market To Witness Exponential Rise In Revenue Share During The Forecast Period (2021-2031)"), ‘Partnering for Performance’, which surveyed finance and HR leaders.  80 per cent of those surveyed said their relationship is [becoming more collaborative](https://www.financedigest.com/smart-becomes-the-first-ssp-to-collaborate-with-white-bullet-to-safeguard-quality-in-the-digital-media-landscape.html "Smart becomes the first SSP to collaborate with White Bullet to safeguard quality in the digital media landscape").The report goes on to suggest that more engagement from the CFO in HR matters leads to increased corporate and HR performance, [higher growth](https://www.financedigest.com/short-bowel-syndrome-market-higher-growth-rate-forecast-2020-2030.html "Short Bowel Syndrome Market Higher Growth Rate & Forecast 2020 – 2030") and improvements in employee engagement and productivity.According to the report, CFOs and Chief Human Resources Officers(CHROs) at high-performing companies dedicate over 50 per cent more time to collaboration than those at companies with lower performance.  However, securing and retaining the right talent is as a key priority too.  According to [Deloitte’s CFO Signals surveys](https://www.financedigest.com/six-in-ten-britons-will-spend-less-at-christmas-deloitte-survey.html "Six in ten Britons will spend less at Christmas -Deloitte survey"), CFOs often prioritise this above driving change, cost control, operational execution and risk.

**[Future proofing](https://www.financedigest.com/meet-the-founder-of-the-web-3-decentralized-social-media-metaverse-and-on-achieving-guarantees-of-green-for-a-proof-of-impact-future.html "Meet The Founder Of The Web-3, Decentralized, Social Media Metaverse; And on Achieving ‘Guarantees of Green’ For A Proof-of –Impact- Future") the workforce in the face of tough economic times**

With Brexit on the horizon, harnessing the [CFO skill set to help set and drive](https://www.financedigest.com/how-does-a-cfo-drive-the-raising-of-capital.html "How does a CFO drive the raising of capital?") HR strategy is becoming important.Almost half of CFOs surveyed in the CFO Survey: 2017 Q2 predict hiring will decrease over the next 12 months.  Sound, informed decisions on budget priorities and allocation for maximum L&D ROI will be crucial.

In addition to political uncertainty, [changing workforce trends are also driving](https://www.financedigest.com/intelligent-investment-in-digital-transformation-driving-change-from-the-grassroots.html "Intelligent investment in digital transformation: Driving change from the grassroots") organisations to redesign themselves.  The gap in digital and highly skilled sectors (70% of organisations cite ‘capability gaps’ as one of their top five challenges according to a [SumTotal whitepaper](http://learn.skillsoft.com/STS-Website-WP-CFO-guide-maximising-ROI-of-Learning-Development.html)), flatter work hierarchies and the management of Millennials mean businesses are moving from traditional, functional structures to focus more on interconnected, flexible teams built around specific projects.  Millennials are taking on more responsibility in the workplace and organisations need to address their expectations.This includes providing the accelerated development opportunities that [more than two-thirds of Millennials](http://learn.skillsoft.com/STS-Website-WP-CFO-guide-maximising-ROI-of-Learning-Development.html) say an employer will need to have in place in order for them to stay –all the while ensuring that funds directed to them are well placed.

[More than two thirds of CFOs](http://learn.skillsoft.com/STS-Website-WP-CFO-guide-maximising-ROI-of-Learning-Development.html) now take an active role in recruitment and talent management. For example, some finance departments are now closely monitoring the acquisition of key hires, their performance after three months and the return on [investment that hire](https://www.financedigest.com/impact-com-announces-huge-investment-in-workforce-with-raft-of-new-hires-globally.html "impact.com announces huge investment in workforce with raft of new hires globally") has contributed to the business. Finance is also working closely with HR to better understand where cost can be saved through reducing employee churn. Often, promoting talent from within to replace strategic, high level jobs when positions become available is more cost-effective than hiring someone new. As well as saving on external recruitment fees, this can also inspire existing employees to [remain with the company and grow into another position](https://www.financedigest.com/automotive-glass-market-to-witness-sales-slump-in-near-term-due-to-covid-19-long-term-outlook-remains-positive.html "Automotive Glass Market to Witness Sales Slump in Near Term Due to COVID-19; Long-term Outlook Remains Positive").

**The key to learning**

Continuing to [move along](https://www.financedigest.com/the-plant-based-snacks-market-to-move-along-the-lines-of-staunch-advocacy-towards-innovation.html "The Plant Based Snacks Market To Move Along The Lines Of Staunch Advocacy Towards Innovation") the strategic path, the finance department will take a more active role in balancing, assessing and making the case for L&D investment. With budgets under pressure, understanding exactly how much the company is spending on training per employee – and measuring the impact of this training investment – is an imperative. [According to the CIPD,](http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/09/10/poor-quality-people-management-costs-employers-163-84-billion-a-year.aspx) poor quality people management costs UK businesses £84 billion a year in workforce disengagement, performance and productivity.

Calculating the true [cost of talent management is not as straightforward as simply monitoring L&D spend against budget](https://www.financedigest.com/ireland-dips-into-budget-surplus-to-ease-cost-of-living-squeeze.html "Ireland dips into budget surplus to ease cost of living squeeze").  As finance’s [role in HR evolves](https://www.financedigest.com/battling-the-evolving-fraud-threat-the-role-of-the-credit-team.html "Battling the evolving fraud threat: The role of the credit team"), it will need to take into consideration the hidden expenditure related to training. The cost of learning expenditure per-head can at least double –if not quadruple – once all associated indirect costs are factored in. These indirect, variable, costs include loss of productivity when employees undertake training and wasted training investments – for example, when employees fail to attend a scheduled training event on the day [due to illness or workplace demands](https://www.financedigest.com/norsk-hydro-keeps-some-aluminium-capacity-offline-due-to-weaker-demand.html "Norsk Hydro keeps some aluminium capacity offline due to weaker demand").

The key to effective L&D is for finance to work closely with training [partners and HR to develop appropriate metrics to monitor and measure](https://www.financedigest.com/ringier-advertising-partners-with-brand-metrics-to-deliver-brand-uplift-measurement-on-leading-brand-campaigns.html "Ringier Advertising Partners With Brand Metrics To Deliver Brand Uplift Measurement On Leading Brand Campaigns") the efficacy of learning and development programmes. Specific measurements need to be developed to quantify returns on each programme,assessing the behavioural [change and business](https://www.financedigest.com/unitedhealth-to-sell-change-healthcares-claims-business-for-2-2-billion.html "UnitedHealth to sell Change Healthcare’s claims business for .2 billion") impact of training interventions. Learner feedback and workplace engagement need to be assessed,and insight from [analytics used to continuously refine the talent management](https://www.financedigest.com/enhancing-credit-exposure-management-through-graph-analytics.html "Enhancing Credit Exposure Management Through Graph Analytics") programme.

**The right tools for the job**

Like many other areas, success in talent management depends on implementing the right tools.A centralised, [integrated and well-managed talent management](https://www.financedigest.com/power-management-integrated-circuit-pmic-market-is-projected-to-grow-at-6-4-during-2021-2028.html "Power Management Integrated Circuit (PMIC) Market is projected to grow at 6.4% During 2021-2028") solution gives access to the most accurate data, allows CFOs to track the rightmetrics, and enables the HR team to better align human capital decision-making with corporate goals.

When it comes to people performance, [productivity and innovation](https://www.financedigest.com/product-innovations-and-advancements-in-technology-to-boost-automotive-ignition-system-market-growth.html "Product Innovations and Advancements in Technology to Boost Automotive Ignition System Market Growth"), organisations can no longer rely on ‘gut feel’.The CFO and finance department is ideally placed to take strategic responsibility for understanding the ROI for L&D, managing its [hidden costs](https://www.financedigest.com/the-hidden-costs-of-property-investment.html "The Hidden Costs of Property Investment"), and ensuring budget value is maximised for every part of the business. Going beyond merely [tracking costs](https://www.financedigest.com/insurer-aviva-says-capital-return-and-costs-targets-on-track.html "Insurer Aviva says capital return and costs targets on track"), finance can understand when to further invest or withdraw budget. The [key to success](https://www.financedigest.com/mvp-for-startups-the-key-to-success.html "MVP for startups: the key to success") is harnessing analytical skills, data-driven insight and the right tool set.


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