Getting CFOs to drive growth in their organizations is more critical than ever before, especially considering that less than half of CEOs have confidence in their organization's ability to grow, per PricewaterhouseCooper's "19th Annual Global CEO Survey." CFOs have often led initiatives to reduce costs and manage controls, compliance and reporting, but thanks to vast array of technological improvements available, finance leaders can have the ability to automate the more mundane aspects of their jobs and spend a much larger proportion of their time on strategic issues, like revenue growth opportunities.
Here are three tips for how finance leaders can do just that.
1. Hiring Ahead of Growth
For organizations to grow, the right talent needs to be in place to generate that growth. This is especially important when expanding into new markets, because new skills are often needed. But hiring ahead of growth has risks. It can be costly to add talent ahead of growth, as cash and time are needed to recruit and socialize new candidates into the organization, while the cash inflows of new opportunities sometimes don't materialize for months or even years.
Finance teams can help mitigate this risk by taking advantage of tax credit programs for hiring and training new employees. Federal and state governments offer tax credits and incentives to eligible employers who hire and/or train new and existing employees. For example, the Work Opportunity Tax Credit from the U.S. Department of Labor is available to businesses hiring individuals from groups that have historically faced employment barriers, and can give employers a tax credit up to $9,600 per eligible employee during the employee's first year of employment.
If finance teams can reduce the risk of adding to their headcount, it can help make the decision easier for the organization to invest in talent that has the right skills to propel your organization's growth.
2. Invest Like a Venture Capital Firm
In addition to putting the right talent in place to grow, organizations should invest in future products, new market expansion, merger and acquisition deals or other strategic partnerships. So finance leaders should put processes and criteria in place to fund investments in new areas. Organizations should try to fund future projects using a model similar to that of venture capital firms, and set them up as separately managed entities.
Of course, this does not come without risks.
To mitigate some of that risk, organizations should consider the research and development tax credit or similar incentives. As reported in CFO.com, the R&D Tax Credit has improved and can be used by various industries, "encompassing virtually any company that's designing and developing new products and processes."
3. Provide Better Analytics to Teams
Another way finance leaders can help drive growth is to work with HR to produce actionable insights to improve workforce decisions. According to a McKinsey & Company report, organizations are successfully using workforce analytics to improve employee engagement and save money. In one such example from the report, a health care organization "used these techniques to generate more than $100 million in savings."
The Harvard Business Review reports that Google uses employee data from employee reviews, promotions and pay histories to determine those likely to quit. Credit Suisse also leverages similar workforce analytics to not only identify at risk talent, but proactively offer these employees new opportunities in order to retain them. Sometimes the best way to grow the business is to retain the top talent required to lead that growth. If finance leaders can work with HR and use workforce analytics effectively, organizations can make better talent decisions and help their organizations successfully grow in an organic way.
Driving Growth When Organizations Need it Most
Despite the uncertainty about future growth that CEOs feel, organizations should invest in anticipation of future growth; however, this is most certainly an area fraught with risk. If finance leaders put the right processes in place to fund the right kinds of investments while empowering business unit leaders to make smarter, data-driven decisions, they should be able to drive growth when organizations need it most.
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