CFOs must be prepared to offer top salaries to attract recruits in today's competitive labor market, said staffing firm Accountemps. Following the most recent Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics (BLS), the firm conducted its own independent research on employee turnover among a group of CFOs.
Accountemps reported 63% of CFOs reported that worker turnover has increased in the past three years, and that lost productivity (29%), new hire training (26%) and recruiting (25%) are the costliest aspects of employee churn, according to an email sent to CFO Dive.
Turnover is "a huge issue for the whole organization. It affects the bottom line, but it also affects morale, productivity, and the brand of the company, if [the company] seen as a high turnover place," Michael Steinitz, executive director at Accountemps, told CFO Dive on Wednesday.
Employee turnover, Steinitz said, is always going to happen. "That’s just the way of the market." But the risks posed by the so-called gig economy are especially acute for accounting and finance departments.
"Every time you lose a person, you lose productivity, too. You then have to retrain a person once you hire them, and you run the risk, as you lose people, of losing more.
As a person leaves, that work needs to flow to somebody, and if you’re not careful, people in the department, like your accounts payable dept, get flooded with work, and that leads to disenchantment," Steinitz said.
But there are "absolutely" ways for executives to improve job satisfaction of those who aren’t their direct reports. "The one thing I would say is a CFO problem: the culture of the organization. Everyone contributes to it, but it starts at the top."
In addition, treatment of teams and individuals — both financially and non-monetarily — goes a long way toward retaining top talent.
"It ... starts from the very beginning, making sure that the person you hire is the right fit," Steinitz said.
"It’s really important the CFO ensures their compensation levels are as competitive as anyone else’s, and it stays up to date with industry rates," he said. He also recommends CFOs offer things like mentorship programs and advising opportunities as a means of engaging employees and helping them feel like they’re progressing in their career.
To increase retention across the company, Steinitz says CFOs must strategically partner with executives in all departments. "All executives need to be aligned,” he said. “Collaborative environments are a major pull factor. There’s more risk of separation when you don’t feel like part of the greater good. Come together and talk openly about the best practices each department head is doing, and whether there’s one strategy or goal that the whole organization is moving towards."
But even with healthy compensation, turnover should be anticipated. "You’ll lose people regardless because of how the economy has shifted towards gigs, so it’s not unusual for people [to leave], even if they’re really happy to see what else it out there."
Steinitz encourages considering damage control before it’s needed. "Should you lose somebody, you need to know how to minimize the effect of that person leaving within their department," he said, suggesting hiring more employees at the onset so one person won’t be swamped with residual tasks.
Steinitz recommends executives open their mind to hiring consultants as contractors and taking measures to ensure work doesn’t pile up for a small handful of workers. "We’re in a unique market," he said. "Do things you normally wouldn’t in order to keep morale as high as possible."