Episode 23: Combating the scarcity of talent at CFO’s office

Madhurima Gupta:
Hi, welcome to the CFO circle podcast power by Highradius. I’m your host Madhurima Gupta and on CFO circle podcast, which we bring to you every Thursday. We talk about the challenges that the office of the CFO face and how emerging technology can be used to solve them today. We are gonna talk about how CFO offices can combat talent, shortage, and retention, and to talk about this particular topic I have with me, Chris Ortega. Hi Chris, welcome to the CFO circle podcast.
Chris Ortega:
Thank you so much. Thank you so much for having me.
Madhurima Gupta:
Absolutely. The pleasure is all mine. So before we get started, I’d like to quickly tell a little bit about Chris. Chris is a financial influencer and entrepreneur financial leader with over 10 years of experience in accounting, financial planning and analysis, corporate finance, finance management, and more. He’s the CEO of Fresh FP&A, a service firm that specializes in people, partnership, process and platform transformation for businesses and teams. He is also currently working as VP of finance at roundtrip. Chris is committed to aligning passion skill talents to help others realize and achieve greatness. So Chris, tell me a little bit more about your journey, how it has been, I mean, of course, the things that I haven’t mentioned, so anything that you would like to share with that business?
Chris Ortega:
Yeah. You know, I’ve been in the accounting finance at FP&A and a CFO space for a pretty long time, primarily focused on high growth, entrepreneurial startup basically seed startup scale up to exit kind of companies. Really passionate about this topic because I think the office of the CFO really has a tremendous opportunity to really be involved in the business and really address some of the key people gaps that organizations and people were seeing. So really excited to talk about this topic and, and really excited to share my skills passes and talents with you.
Madhurima Gupta:
Absolutely. I look forward to this discussion as much. So Chris and you know, post-COVID 19 pandemic I mean it has been a test case that no one really wanted. And for the last few years, employers have grappled with shrinking talent pool with global pandemic having, you know, accelerated this talent crunch many folds. And I don’t see a relief happening anytime soon as well, given, you know, you know, COVID is still not over, it’s still coming back. There are different ways that are happening. So employer retention, no doubt is still a very big problem with employee to costing us businesses about 1 trillion every year and individual replacement costs filing up every now. And then. Why do you think executives are climbing out of the labor deficit inflicted by the pandemic?
Chris Ortega:
Yeah, I think this is a really important topic. And I think when you look at the office of the CFO, right, when it comes to people, we have traditionally had this mindset of, you know, we are the scorekeepers, we are the people in the corner just drilling out the numbers. I think really the office of the CFO has an opportunity to really connect to the people and not just our direct reports, not just our controllers, our accounting people, our FP, and a analysts, but really be inside the business. And I think the pandemic has really changed its value proposition for CFOs because the business now looks towards the CFO of saying, Hey, you were able to navigate us through a lot of complexity, a lot of risk, a lot of uncertainty inside the business, which, you know, a lot of industries and organizations are continuing to see. And we did that by not just leveraging our business acumen and our us gap and our IFRS knowledge. We actually had to be business partners. We had to understand the business. We had to turn complexity into clear, concise conclusions. We had to be great storytellers. So the business has seen that the office of the CFO can be outside of just the numbers and actually be inside the business. So I think that’s a really important point is like we have this opportunity to be proactive and we need to start as the office of the CFO starting putting our people before the profits.
Madhurima Gupta:
And if you talk about talent shortages in your experience and in your peer group, what has impacted the CFOs the most and what are the struggling with?
Chris Ortega:
Yeah, I think it’s really the key thing of and I share this a lot is that when you look at that high potential high, talented person in the environment that they’re in now, it’s really just been this awakening to say, you know what, my skills, passions and talents are way more valuable. And I wanna be, you know, I wanna have a seat at the table. I wanna make sure that I’m involved in learning the development. I wanna be at a company that has a social ESG initiative, right? Economic social governance, like they want to be involved in the community. So I think people are starting to realize is that their role, their opportunity, even with the CFO suite, is that it’s more than just about turning and burning through the Excel and providing the numbers. I wanna work at a company where I feel like my voice is heard, where I feel like they have an active stance in the community. And it’s also a place where I feel like I can learn and develop my skills, passions, and talent. So I think that evolution and I, it, I summarize it to say like, it was always that analogy that the grass is greener on the other side. Right. Well, I think if you take that further, the grass may not be greener on the other side, but at least those high-performance, high-potential people are not the ones cutting the grass. Right. So I think that transition has really happened and people have really stood up and said, you know what? These are the things that are important to me that are important in my development that I look for in an organization and companies that have really been proactive in addressing and meeting those needs of those employees. Those are the ones that are having retention and, and, and really keeping the employees engaged versus being reactive in saying, oh man, like if you’re being reactive about your people and performance strategies, now you’re losing the game. Right. Cause those high potential high, talented people, they’re gonna go find other places.
Madhurima Gupta:
And do you think salary plays an important role or key role or is it just stable stakes today?
Chris Ortega:
I think salary traditionally it always was like a differentiator, right? Like you couldn’t compete. If you were a smaller company, you couldn’t compete with a Microsoft or Google that are paying like three times more. And that at a stage was like, I want a big logo name and I want to go chase the bigger salary, but now you’re starting to see people. And this has always been like a driving point for me. And my career development is I never chased money. I chased about skills and developments, challenges, and opportunities. You’re gonna help me grow. And I think that’s what you’re really seeing right now is like people are saying like, I don’t wanna go have that, you know, $150,000, $200,000 job while I’m just doing like A, B and C every day for the next 40 years, I wanna have the ability to, to work with different business partners. I wanna develop new skills. I wanna have a seat at the table. I wanna be involved in decision-making. So I think salary is a major component of it, but it’s not the deciding factor that it used to be. Right? Skills, passions, and talents, developing your experiences, have an opportunity to make an impact. I think those are being way more valuable than saying, I can go have a six figure salary, but not be fulfilled in my role.
Madhurima Gupta:
And when it comes to CFO’s office, what, according to you is the leading reason for attrition?
Chris Ortega:
I think to me, the office of the CFOs and CFOs are faced with this is that traditional mindset, right? That traditional value proposition, right, is I’ve talked a little bit about this earlier. The biggest gap that CFOs are having is like, they’re not connecting that people impact to the, you know, the profits and not just the profits of the organization, but the profits of your team, right? Like the value proposition of the CFO now is to be more modernized. We have to be technology evangelists. We have to be great communicators. We have to speak the business’s language. We have to leverage automation to streamline our processes. We have to be you know, great business partners. So like the measuring stick of what the CFO to the business is being compared against CFOs are still operating in this traditional, Hey, we have to have our annual review process and we can’t give you this promotion because it’s outside of our annual view process. Like a lot of these you know, traditional people, performance management strategies that were back when cars were assembled and you know, like this traditional mindset, it’s not equivalent to what the talent of people are looking for today. So I think that adoption and that ability to say, Hey guys, we need to take a step back and say, we need to evaluate our people strategies. We need to evaluate our processes. We need to evaluate our partnership. We need to evaluate or reevaluate our platform adoption in terms of tool and technologies. We need to reevaluate our performance strategies. Ultimately we need to evaluate the profit optimization. We’re seeing in the business, which to me, those are those 6 P’s that I think is critical to any business or financial transformation. And that, that is like the first step is I think, CFOs listening to this and VPs and all leaders in your finance organization, you need to take a hard reality. What is the current state around all of those pillars? Once you come to that hard reality, now you can have a plan to say in the next 6, 8, 12 months, here’s how we wanna improve our people strategies. Here’s how we wanna improve our process strategies. Now you provide a baseline. I think that is the fundamental gap that CFOs are missing. Those legacy, traditional historical kind of strategies and tactics that you were implementing. That’s not gonna fly in the future.
Madhurima Gupta:
I do agree with that. And in order to prevent resignations within their team, I think, and ensuring that jobs satisfaction as in their teams have job satisfaction. I think the tasks that are monotonous and time consuming, those should be automated. Would you agree?
Chris Ortega:
Oh my goodness. Like, listen, let me have a hard reality with everybody. Let’s have a heart-to-heart with those CFOs, those VPs of finance and finance leaders. If you’ve got that high potential high performing person living and breathing in an Excel document for 75% of their time, listen, they’re already looking for a job. They probably got two or three offers already, right? We have to look at that shift, right? The low value activities of data analysis, data mining, updating Excel files this very time sensitive, like very high frequency. You don’t want your talented resources on that. Right? Automation, RPA RO robotic process, ultimate robust process automation, artificial intelligence, and machine learning. These are tools and technologies that you wanna have focused on that to put your high potential person in the value, added activities, collaboration, communication, connection, and building the community of business partnership between the office of the CFO and the business. That’s where you wanna spend that time, energy and effort. And that’s more strategically focused, right? But that’s also, you know, challenging those CFOs and those VPs of finance and those finance leaders to say there’s a whole nother measuring stick of complexity and competencies that you need to look for. Right? One of, of those being an example, the art of storytelling is by far one of the most important core competencies of the office of the CFO. I would take that competency. If you say, Chris, do you want somebody that knows us gap? And I RS, and can speak the new ASE 6 0 6 language, or do you want a great storyteller? I’m gonna choose the great storyteller, right? Cause tools and technologies can gimme my ASE 6 0 6 and my process optimization. I’m gonna want somebody that can take this a ASL six, this process complexity, and communicate it and tell a story to a business partner. So I think that’s a, that’s so important around automation. You’ve gotta put your people in the high value activities, get them out of the manual routine, low value labor intensive manual processes.
Madhurima Gupta:
Absolutely. And on that note, you know, I would probably wanna talk about why CFOs should invest in digital solutions. And I think today given that all the companies are switching to hybrid work models and in light of labor shortages and future disruptions that are possible. When would you say that it is really very important for CFOs to look at investment in digital solutions as an investment and not an expense?
Chris Ortega:
100%, the office of the, and this is getting back to, I think, I think a traditional mindset right. Is risk and compliance, right? That’s an important role of the office of the CFO. And typically like we’re, we are as the office of the CFO, historically, we’ve been technology laggers, meaning, you know, for example, when you look at marketing and sales groups, they’re more like technology adopters, they’re like early adopters of new technologies, right? So they’re a lot earlier in the technology curve, which speeds up their processes. We, as the office of the CFO have been technology laggers, meaning that we’re looking at it to say, we wanna make sure that a technology has rescale. And how do you a, a typical phrase always get from a lot of CFOs is like, how do you audit a machine learning algorithm? You should be thinking about how you audit an AU algorithm, right? You should be thinking about how is this machine learning technology going to standardize and streamline and automate our processes. That way I can take my finite resources and have them redeployed in high-value activities. So 100% we need to move from technology laggers to technology adopters. And I’m not, you know, I’m not venturing off to say, we need to move off to be the early adopters and be the Guinea pigs around things. But tools and technology are, that’s how we scale, right? We’re not looked at, we’re looked at as a cost center inside the organization. And we’re meant to serve the business right when sales are gang busters and sales are growing 89%, they typically sales have that opportunity to go hire more sales people. When sales are ruined 80, 90% in the finance organization, that’s not our green light to go hire people. And also, I think it brings up a tra a traditional fallacy. A lot of CFOs have traditionally CFOs say, there’s a business problem. Go hire people to go solve that business problem, get rid of that mindset. Don’t hire people to solve basic business problems, leverage tools and technology to solve 70, you know, 60 to 90% of that process, then have your per people. That to me is our, I think, a traditional mindset that needs to be eliminated. We need to be technology adopters and tech and technology enthusiasts, not laggers and, and technology, critical people.
Madhurima Gupta:
And that gets me to my next question, which is on you know, how adoption of new technology can help a CFO’s office enrich its B2B workforce you know, from the standpoint of reskilling and upskilling, what is your opinion on that?
Chris Ortega:
So I think like when you’re upskilling and scaling with technology, it’s a great opportunity to really understand the current state of your processes right now. Right? Like I get back to that example of doing that current state assessment of like a contract management process, think about a contract management process that a CFO’s, you know, involved in, right. That has customer impacts that has financial impacts that has cashflow impacts. The contract management process in and of itself is probably one of the most important processes that you want to have technology, right? Because you don’t want, and you want to be more proactive. So the other opportunity that technology adoption allows is more proactive communication and collaboration with business partners, right? You’re able to collaborate more and you’re able to be further up in the value proposition to say, Hey, like this, at this point of this contract, this is where we start talking about this counting. We want tools and technology to maybe alert, finance, to say, Hey, we gave a greater than 25% discount. Now finance knows, and we could be more upstream in the process, right? Versus we get the contract now on our desk. And we see a 50% discount that we gave to a customer it’s already signed with the customer it’s already been communicated. There’s really nothing we can do at that point. That collaboration is too late in the process to where we have to sign up this contract that is not cash considerate for us, but it also doesn’t allow the business to understand why this is a bad contract. They’re gonna continue to do what they need to do to close a deal. Right? So that’s technology adoption being further upstream, that technology adoption increasing the collaboration and that also that technology adoption, a centralizing processes to where people know this is where the process could or could not break down. How can we address it? How can we partner together and be more proactive, addressing it early in their process. That way it doesn’t have those downstream time, energy effort, business inefficiencies. So that to me is like the greatest opportunity that technology has to scale and upscale people.
Madhurima Gupta:
Thanks for sharing your opinion on that. Next up, I, I think, you know, this is the last part of this discussion that I wanted to get your opinion on. And, and that is on how CFOs turn their concerns of let’s say staff retention or upskilling over to HR, right? The human resources or the peoples and people and culture departments that these companies have. So what do you think, how important is it for CFOs to actually, you know, step up and probably play a vital role in developing and retaining employees?
Chris Ortega:
So, listen, this is another piece of it. The most valuable resource in any organization is not your technology. It’s not your algorithm code, it’s not your proprietary. It’s not your patents, the most valuable resource in any organization, no matter what industry you are. If you’ve been in the industry for two years, three years, 80 years, a hundred, whatever, it’s your people. So to me, I always find it in every role that I’ve been a part of HR, sales, marketing are always my key business partners, right. And HR, that’s the people aspect. And I think too many times like, yes, CFOs, I’m challenging. You have to be comfortable and excited about the warm and fuzzies of an organization like developing a culture of learning and high performance. The CFO should be involved in that, right? Having a culture of you know, being very in tune with, with the social economic things that are going on, the CFO should be involved in that because at the end of the day, no matter what, you’re no matter what your model says, no matter what report you’re driven at the end of the day, everything that a CFO is doing from modeling, forecasting and budgeting, there’s a people human element affected by that, in everything that we do, right? You go develop a revenue forecast that says you’re gonna over you know, crush your margin. And now you’re gonna pay commissions of 40% that has a people aspect of it. So at the end of the day, everything that we do in the office of the CFO has a human element towards it. That’s why I get back to mention earlier is like, we’ve gotta put the people focused before the profit focus. And yes, that is, that may sign wild, that you gotta CFO talking about putting what Chris, you gonna put people before your profits 100%, I’m challenging you to do that. So you gotta be involved in the recruiting process. I think a great example is a lot of organizations are doing state interviews, right? How are you engaging your talent to say, what keeps you here every day? Why do you like staying with our organization? What else can we do? Right. A great question. You can ask and say, what else can we be doing to help support our employees? Right. There’s a lot of, I mean, mental health is a great example of that right now is there’s a lot of people that are going through a lot of different things right now. How can we support the business? How can we have strategies and tactics? How can we have programs? How can we make investments in Jedi, justice, equity, diversity, and inclusion. And not only can we make investments in it, how can we develop a 3, 5, 10 year strategy that we’re gonna make sure that we’re addressing justice, equity, diversity, and inclusion. These are all one of the most important aspects that should be in the CFO’s mind and thinking about, right. Like if you’re balancing saying, Hey, do I go update this Excel model? Or do I go partner with HR to develop a more robust benefits package that keep and retain and tracks new talent? You gotta venture over in that element. Right? But again, I think like in summary, this is what the modern CFO needs to be thinking about. You need to be thinking about how you’re technology advantage is. You need to be thinking about how you’re connected to your direct people in your finance organization and indirectly in the organization. How are you driving the culture? How are you set an example as a leader to be a, a value added business partner? This to me is the opportunity that we have, and we have a tremendous opportunity to write the legacy of what it means to be a CFO in the next five to 10 to 15 years.
Madhurima Gupta:
Thank you for sharing those insights. Chris, I, I think a lot of people will be able to start thinking their roles in a new direction. You know it’s like breath of fresh air to look at how people should actually be managing talent shortages, and probably even helping their existing employees build up and reskill to meet those shortages. So thank you so much for your time. And before we wrap this up, if I was to, you know, ask for three tips for CFO office to combat talent, shortage and retention, what would those three tips be?
Chris Ortega:
Those three tips. The first one is get connected with your people, find out and be a culture carrier and advocate. The second one is, is really, really take a step back and take the lens from the empathetic view of data-driven decision making, be an empathetic leader, right? Listen, reflect, understand your, your people, your customers, your vendors, your suppliers. The third one is that tool is, is that legacy aspect that I always love to have CFOs thinking about, right? We have an opportunity now, post-pandemic to really revolution off what it means to be a CFO of the future, the value that we bring, the impact that we’ll have, the influence that we’re able to draw upon. And just know right now you have the opportunity to write that tremendous legacy. So I think those would be the best three tips. And if you haven’t already do something fun with your team right now, I have a virtual send them do dash gift cards you know, have, ’em go to a nice event, right? If you’re, if you’re doing stuff, give them opportunities to go volunteer somewhere, put the people aspect back into the business of running and being a CFO. We have to make sure we put the people first and not last in our decision making. And we have to make sure we have that opportunity to continue to amplify the, the great opportunity we have to meet, to revolutionize what it means to be a CFO in the future. Those will be my tips and tricks.
Madhurima Gupta:
Absolutely. Thank you so much for sharing those and for our listeners out there, I hope that you enjoyed this discussion. Stay tuned for more sessions that we bring with experts like Chris.
Chris Ortega:
Yeah. And if you wanna follow me, if there’s any other make sure to check me out, I’m all over LinkedIn at fresh FPNA, check on my website, www.freshfpa.com. I’m all over LinkedIn. Happy to have any questions, comments, and keep being great.