CFO to CFO: Finance’s Role in RecruitmentBy
CFOs grapple with issues such as the gender pay gap and parental leave to attract and retain skilled finance professionals.
Every organization is defined by its personnel, so it’s paramount to attract and retain the best and brightest people. Even as some companies have hit the pause button on hiring during the COVID-19 pandemic, effective policies and procedures for recruitment and human resources (HR) remain essential for organizations’ long-term success and sustainability. Joseph Hayek, CFO of Worthington Industries, and Scott Haralson, CFO of Spirit Airlines, discuss the HR, recruitment, and hiring trends and challenges related to management accounting and the finance function.
SF: What HR issues or challenges should be on a CFO’s radar?
Hayek: It’s about our people and the long-term cost and quality of healthcare. We’re self-insured, so we focus on what we can do, not only to help our people be more healthy, but also to keep costs low. We’ve had a wellness program for about 12 years. We recently rolled out a “higher touch” or concierge approach to helping our people manage their own healthcare. We certainly want people to live their best life, but we also need and want to keep costs as low as we can.
Haralson: Benefits costs are expensive, and we care about productivity and efficiency in our workforce, putting dollars in the right places, but from a longer-term, strategic view of HR, our employment needs span a lot of different work groups, from customer service, retail-type jobs at the low end of the pay spectrum through very highly skilled labor in pilots, flight attendants, and mechanics, trade skill-type jobs. We’re an e-commerce company at the base, so we do a lot of IT work, plus a quantitative administrative workforce.
So our needs are diverse, and as a company that’s been growing at about 20% a year for the last six, seven, eight years, we’re hungry for talent. Our desire is to grow the business and increase the level of talent within the organization, where there’s a lot of demand for those jobs. So balancing all that has been difficult, and we spend a lot of time on making sure that the first line of sight here is making sure we keep the people that we have, so retention is critical.
SF: Is there a skills gap in your sector or increasing demand for specific types of experience?
Haralson: The biggest gap or hunger for us internally here is on the data side, be it those on the IT side that house, store, and retrieve all that information, but also even more critically, those that actually do digest and use this information. That’s where our finance, accounting, and even our HR functions have shifted in what we desire from the candidates. The quantitative strategic mind-set is critical for a lot of jobs. On the finance side, our desire to seek those that have more of an IT background, information systems or data scientist kinds of roles, is becoming more critical to what we do. So that gap has really been growing over the last decade or so, and it’s tough to find people with that blend of quant and data scientist modes of experience.
Hayek: We’ve embraced and built an analytics team, but in finance specifically, we’re looking for people that can help us understand, make decisions about, and then drive automation—I call it digital finance. It’s a matter of finding the right people and then enabling them to grow into a role where they’re understanding what the data says, what it doesn’t say, but then also being able to think about it strategically. You can have financial models that say different things based on assumptions that you make, but where are the potential flaws in the model, where are the potential sensitivities in the model, and how does it all relate to the decisions that we’re trying to make?
We’re a manufacturing company, and in our space, getting away from the corporate office, engineers are still at a premium, and that business is very competitive to find and retain those folks. Welders and other skilled laborers are also in high demand, and we’ve got some operations in rural areas, and we want to encourage the younger people there to come and work for us. So we have relationships with high schools, trade schools, and chambers of commerce. We have employee referral programs. And it’s incumbent on us to understand what our current employee base is up to so that they can help to inform how we think about the folks that we might employ for the next 10 or 20 years.
We do what we need to do every week, month, and quarter to close, but it’s ultimately less about reporting and more about strategic finance, as your magazine is aptly named.
SF: What’s the best way to tackle the compensation gender gap?
Haralson: From a gender inequality perspective, we care about that a lot, and we make sure that we true that up periodically. So we look at a quarterly review from an inequality perspective and make sure we don’t have those pay gaps existing in the organization.
Hayek: For us, it’s about promoting more women into really impactful positions. Our industry—metals manufacturing and steel processing—has historically been male-heavy in terms of percentages, but that has begun to change and we intend to continue to lead that change.
Now the workforce is comprised of more women than men in the United States, and we manage our compensation with market reviews, which are gender-blind, and we intend to continue to focus on really being an inclusive workplace. We take steps to be intentional about avoiding the status quo and put in checks. In hiring decisions that are made, you become and stay more inclusive and have more women in leadership, because it’s the right thing to do ethically and it’s also the right thing to do for the business.
As you encourage different backgrounds and viewpoints, you ultimately get better decisions. And for an organization trying to tackle that, it’s much more than paying lip service to it, but embracing not just that you should try and accomplish gender pay equity or address this pay gap but that it really is the best thing to do for shareholders, because you get a more holistic look when you have diversity of background, opinions, and viewpoints that can better inform the decisions that we ultimately make.
SF: In establishing a parental leave policy, how do you balance the needs and desires of employees who become parents with concerns over the impact on the organization’s bottom line and productivity?
Hayek: We actually just changed our parental leave policy in January 2020. It’s now more expensive than it was, and it’s offered to both men and women. It’ll run concurrently with the Family and Medical Leave Act period, but it’s a balance of looking at a benefit and how you’re thinking about the cost. People are our most important asset; it’s incumbent on us to take a measured and long-term view of our workforce. And so, while this program costs a bit more, we’re convinced that’s the right thing to do for us.
Haralson: We’ve specifically expanded some of these benefits as well, but this is really around a broader discussion of how companies can be a more cohesive part of a team member’s life. And we’ve opened up that mentality here to be a bigger part of that balance, and that’s really a better way to think about it as the distinction between a team member’s outside life and work life. It’s around balance, and where we’ve expanded that ability to be flexible in a lot of ways, not just on parental leave, but in other forms, it has paid some dividends. We found that the employees or team members have become a little more tied to the company; their enjoyment in the office is higher, and they’re brand promoters as opposed to detractors. It’s a matter of thinking about those benefits as staff retention tools as opposed to a short-term focus on productivity. A longer-term view around employees’ lifestyle matters.
SF: How does financial management and technology impact HR, recruitment, and hiring?
Haralson: It’s around efficiency of that process. We do a lot of hiring and evaluation of the cost, productivity, where we’re spending our money, and having the right tools, from organizational charts and productivity measures to recruiting tools and performance evaluations. All of those things become the cohesive view of how we’re being efficient and productive with our labor assets. And so we’ve tried to expand that through the years. The new platforms and tools allow us to grow this infrastructure with the organization. So we’re excited about where it can go, but that vision of having a cohesive all-in-one solution around the labor assets is important.
Hayek: Digital tools, LinkedIn, and other platforms have made recruiting a lot easier, more accessible, and real time, and so our recruiting and hiring are far more efficient than they used to be, and we certainly like the speed that we can operate at and the costs that we’re able to drive out of the process. At the same time, it’s a double-edged sword. Our people can be recruited much more easily as well; you’re only a few clicks away from having a real conversation with a recruiter that might try to tempt you into going somewhere else.
And so, we’re trying to be really mindful of what is out there marketwise, and as an employer, how our people are feeling about us. We do cultural health surveys, give and get some real-time feedback, and sponsor programs on inclusivity. We value our people a great deal, but how they feel about us is more important than ever, given how easy it is for other folks to make contact with ours or vice versa. Our chief human resources officer, Cathy Lyttle, is setting up a shared-services model for HR, and so it’ll streamline how we deliver some of our services that’s tech-enabled and helping us to provide due services to our employees efficiently and effectively, ultimately at a lower cost.
SF: As finance professionals are increasingly relied upon to understand technology and cyber issues, how does that extend to recruitment or staff development priorities?
Hayek: Cybersecurity is critically important. When we think about robotic process automation (RPA) and AI, one of our board members had said, “We need to move quickly but not hurry.” And so when you think about all these things that we’re doing, it needs to be all-encompassing, from process technology to change management, and all the ancillary dynamics reporting and compliance.
We want to grow efficiently and use technology to drive revenues, but also to streamline cost. We have to keep that process in mind: Move quickly, but don’t hurry. It’s about our teams not having to be the master of everything, but being able to partner and build relationships across the organization with the analytics team, the IT team, and the businesses. And how that happens, to be comfortable understanding technology, but also to avoid the pitfalls of racing ahead without understanding how things are going to change as a result of embracing this technology.
Haralson: We deal with a lot of different technologies, from the data and cybersecurity perspectives and more, but we run a sophisticated operations control center. The nerve center of our operation is digital, and so we have to spend a lot of time understanding the products that we use. For an e-commerce company that has migrated dramatically over the last 10 years, staying up to speed and being willing to invest in the right infrastructure are key, which doesn’t mean that we have to be experts on the finance side, but we have to understand how to help our teams make the right decisions, pick the right products, and do the right evaluations.