No longer consigned to corner offices, finance leaders are being summoned to all departments for their guidance and support of wide-ranging business initiatives. One of the top 2018 business trends should be the continued rise in prominence of the finance department. According to Robert Half, more than half of CFOs were playing a role in shaping corporate culture. The CFOs are helping develop their organization's mission and define the work environment.
With technology increasing business expectations, finance will continue to have a big say in influencing business strategy next year. So as the the calendar turns, here are six top 2018 business trends that should shape the world of business. You'll see they all involve finance leaders.
1. A CFO Offers Support Around the Organization
With finance shaping just about every aspect of business, it makes sense that CFOs have more responsibility than ever. It's not all about counting dollars and cents — a CFO's job today calls for financial stewardship and a sharp understanding of how organizations can thrive in the global economy.
Some experts see the CFO as a "CEO in disguise," with the two executive positions now acting as complementary roles, according to Business Mirror. Such a partnership makes sense, as CFOs might have more time for providing support within an organization than a public-facing CEO does.
For example, CFOs now work side-by-side with IT. Cloud technology has empowered businesses of all sizes to have mobile and more productive workforces. Finding and implementing the proper IT infrastructure and tools to support mobility requires IT and finance to jointly plan short- and long-term projects. With IT's expertise in technology and the CFO's understanding of finance, organizations have a better chance of deriving value from their tech investments.
Similarly, CHROs and CFOs have teamed up, recognizing that hiring and keeping the best talent boosts productivity and culture, not to mention profits. HR needs the right technology and its own talent to maintain a top workforce, and thus could use the support of finance to achieve its goals.
2. Cybersecurity Efforts Require Money and Advocacy
This past year, several large companies and even the U.S. Securities and Exchange Commission reported data breaches. With resilient cybercriminals needing only free hacking tools, no organization is truly safe.
Constant threats have many CFOs working closely with CIOs to review cybersecurity technologies and strategies. Gartner projects that worldwide spending on IT security products and services will reach a total of $86.4 billion in 2017, an 8 percent increase from 2016. New cybersecurity solutions aren't inexpensive. IT needs clear guidance from finance on spending limitations.
When CFOs and CIOs frequently communicate, finance has a better understanding of their IT department's cybersecurity achievements and struggles. Armed with this insight, a CFO can advocate and approve technology purchases and budget increases for more IT employees.
3. The Talent of HR and Finance Are Seeking Other Top Talent
This summer, job openings in the U.S. hit an all-time high, with more than 6 million positions available, as MarketWatch reports. The U.S. seems to have just about recovered from the Great Recession. The boom means CHROs need more resources for recruitment and retention.
To land the best talent in a robust job market, HR has to be competitive and offer perks such as tuition reimbursement, sign-on bonuses, flexible work policies and unique — but costly — recruitment events. HR departments are also investing in data analytical technologies to get insight on employee productivity and sentiment, and to scour social media and other public forums for new talent. As with IT, HR will benefit from close collaboration with finance. Working in harmony, CFOs and CHROs can successfully plan the workforce of the future.
4. Government Regulations Require Due Diligence
For now, the Affordable Care Act (ACA) remains intact. Several legislative attempts to repeal government-supported health care failed this year. But Congress may yet take up legislation to alter the ACA, and President Trump has considered diverting federal resources from the ACA. The topsy-turvy landscape means finance leaders have to continue staying on top of any pending health care legislation or even the slightest tweaks by the executive branch so their organizations can remain compliant.
Also, immigration policy continues to change under the Trump administration, with some states and municipalities agreeing or refusing to cooperate with federal authorities on enforcement. HR leaders should stay well-informed of any potential changes to employment authorization documents and other immigration policies that could affect their workforces. President Trump and Congress also want to revamp the tax code, and that's a development that demands close attention from all finance leaders.
5. Payroll Options Are No Longer One-Size-Fits-All
It makes sense that a digital workforce eschews traditional paper paychecks. And it's not just millennials who are used to going all-digital — many Gen Xers and baby boomers also prefer using mobile applications on their devices to handle banking transactions. Every generation of workers likely expects its employers to shift compensation to a digital transaction.
ADP Research Institute® found that mobile HR apps have a 60 percent higher rate of use than stationary apps, and many people also use their devices to check out their 401(k) plans. The mobile movement will only gain steam in 2018, so finance leaders need to consider shifting elements of their payroll processes to accommodate employees' mobile routines.
Employers can also transfer an employee's wage onto a payroll card, enabling a worker to use the card much as they would a debit or credit card. Many people still don't use traditional banks to handle personal finances. Pay cards give unbanked employees an easier way to spend their money.
Lastly, finance leaders are keeping better track of payroll compliance for seasonal, freelance and tipped workers. They're also seeking help to avoid payroll fraud. As 2018 nears, managed payroll is becoming a viable option for handling complex laws and sensitive financial information.
6. CFOs Have the Time and Tools to Be More Strategic
With technology automating accounting, payroll, financial forecasting and other tasks, CFOs have a strong grasp of their daily responsibilities. It also means they have a bit more time on their hands.
Having the freedom to assume more work means CFOs can now pursue the long-term, deep-dive reporting that uncovers small but meaningful inefficiencies. They are already using analytical tools to explore unnecessary costs and finding ways to improve processes, production and profit. A greater understanding of the organization also informs their collaborations with other executives.
Finance Leaders Have Considerable Influence
To many, a CFO's main responsibility is to save an organization money. While that's certainly a key obligation, turning over every rock just to decrease expenses shouldn't be the only priority of finance leaders.
As 2017 demonstrated, finance leaders are at their best when they collaborate with and support IT, HR and other departments. They're also demonstrating a firm grasp of emerging payroll trends and crucial regulations, and are serving as a strong voice in the shaping of organizational strategy. Expect them to continue having considerable influence in 2018 and beyond.
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