Manufacturing CFOs’ newest commodity concern: Human Capital
In addition to managing financial capital for the enterprise, chief financial officers (CFOs) often worry about another important commodity: human capital. That is, how do you attract and retain talented accountants, analysts, controllers and other finance specialists?
This was the focus of discussion at a recent Manufacturing CFO Peer Exchange sponsored by Grant Thornton. CFOs gathered to discuss challenges and share successful strategies in their quest to identify, hire and retain finance talent.
Manufacturing CFOs said they faced a number of challenges in attracting talented workers, especially Millennials.
First, there is the stereotype that manufacturing takes place in a dreary factory. Many of today’s workers are seeking jobs in high-tech firms, and aren’t aware that modern manufacturing utilizes sophisticated technology to produce and deliver goods.
Then there is the old mantra: location, location, location. Many workers, particularly Millennials, want to live in major cities with a vibrant entertainment and recreation scene. A number of manufacturers are located in smaller cities in the heartland of America.
Finally, some manufacturing CFOs admit that they’ve been slow to adopt some of the workplace practices today’s workers find attractive, such as flex time and working remotely.
“When you consider the location, industry and being at a mid-sized company, some candidates see limited career path opportunities…And we don’t offer a lot of flex schedules or work from home options,” said one CFO from the Midwest.
Despite the challenges, some manufacturing CFOs have discovered successful strategies to attract talented finance employees.
A number of CFOs use internships to bring in new talent, a practice that seems to work in hard-to-recruit locations. One Midwest manufacturer has interns work within its internal audit function, which allows them to get a feel for the company, and for the company to assess each intern’s performance.
“We use it as a training ground…it can be a good source of hires,” the CFO said.
Temporary finance workers also are a source for new talent. A temporary position is another way for the employee and the company to develop a relationship and gauge whether it can be longer term.
“Getting temporary help is a way to find people with talent and skills, and it can end up becoming a full-time hire,” one CFO said.
One Midwest manufacturer resorted to hiring a full-time recruiter on staff. The recruiter not only hunts for qualified finance candidates, but talented workers for other positions within the company.
Finally, when all else fails, manufacturers can consider paying higher salaries to attract talent, said Eric Gonzaga, partner and practice leader for Grant Thornton’s Human Capital Services group.
“Sometimes you must say, hey, these are hard to fill jobs, and let’s think from a compensatory standpoint moving the salary above market levels and making it competitive to national levels,” Gonzaga said.
Keeping talented finance employees is equally challenging for manufacturers, particularly when it comes to Millennials.
A number of research studies, including one by Grant Thornton, show that Millennials have no qualms with job hopping. They place lifestyle and location choices above career opportunities, enjoy flex time and working remotely, seek out frequent feedback, and like a road map for their career development.
One Midwest manufacturer has introduced a program in which all company employees have an individualized career development plan which outlines career goals and future opportunities. The company has monthly discussions with each worker to assess progress and make adjustments to the individual plan.
“The plan in and of itself isn’t the value. The value is that intentional career discussion that they’re having with their supervisors and others within the organization. I believe it’s one of the reasons why we haven’t had significant turnover,” the CFO said.
Other manufacturers use a similar tool called a career ladder program in which employees discuss with supervisors their projected promotion path. This allows employees to develop a road map for future promotions and provides the employer an understanding of a worker’s desires, and what training and skill the worker needs to grow. “An old but re-emerging practice is to establish a ladder that is customized per individual, or represents a focus on additional levels that reward for multi-disciplinary competencies. This allows an organization to both focus and reward high performers, while allowing these employees to take ownership of their career direction,” says Gonzaga.
“Typically when we’re talking about hiring someone, we’re trying to identify their energy, skills and abilities to assume a positon two levels up from the position we’re hiring them for,” said one CFO. “We want someone with the skills and intellectual curiosity to develop into other roles in the company.”
Jeff French, Grant Thornton’s National Consumer and Industrial Products managing partner, said that giving employees a role and title that is broad and not narrowly focused may also be attractive to employees. “If an employee receives exposure to a broader range of opportunity and skills, they’re more likely to stay with a company over a longer period of time.”
And while manufacturing companies may not be able to operate under the same workplace practices as a Silicon Valley tech firm, some are experimenting with new concepts. One CFO explained how his company renovated its headquarters to create a more pleasurable work environment. The company also opened a satellite office in a nearby major city to allow workers the option of working closer to home.
“We’re competing with the Big Four (accounting firms) for talent,” the CFO said. “So anything we can do to improve our workplace culture, the better opportunity we have to attract finance talent.”