Facing the war on talent

From accountants to chief financial officers, finding finance professionals with the right mix of accounting and business skills is proving quite difficult for employers in Singapore, reports Sonia Kolesnikov-Jessop

When Bernard Yeo, a director at Channel Consulting Group, had to help find a new chief financial officer (CFO) for a listed company, he got about 50 applicants, but ‘most had too much of a financial mindscape, only thinking about traditional accounting functions, without thinking about the business function,’ he recalls. ‘Business accountants are in increasing demand, but they are in short supply in Singapore. In that case, I could only short-list two or three.’

The role of CFOs around the world is fast changing as they are increasingly asked to work more closely with their chief executive officers (CEOs) in decision-making. As ACCA’s recently released report, The Finance Professional in 2020, pointed out, in the short to medium-term the finance function is expected to complete its transformation from having a transaction-processing focus to becoming a fully fledged business partner with a high decision-support capability. The extent of the CFO’s organisational knowledge and influence is expected to continue to grow. In fact, by 2020, the finance function may also have assumed a more clearly defined leadership role throughout the organisation, with responsibility for strategy development and risk management.

‘It’s quite clear that the role of the CFO has evolved a lot in recent years. Today’s CFO is really a critical part of any major decision of the business units. The statutory reporting is a function that is a given, and you must take care of corporate governance too, but being a business partner has become the most valuable part of any finance function,’ explains Koh Kah Sek, CFO (Singapore) of SingTel.

In Singapore, this new trend in broader CFO qualifications is just starting to emerge. ‘Thus, the skill-set gap in the profession is still very much there,’ points out Pernille Storm, director for accounting, banking and finance practice at the recruiting firm Hudson. ‘Clearly, the candidates who can demonstrate strength in negotiating, implementing and managing complex business strategies are more highly sought after in the market.

‘As this requirement for value creation and decision-making support is fairly new in Singapore, a lot of international firms bring very experienced US or European CFOs, or senior finance people, to their subsidiaries in Singapore for two to four years of best practice sharing with the local people to allow a knowledge transfer over time,’ says Storm. ‘This is probably one of the most effective ways a company can develop this skill-set along with having periodic professional development, as well as coaching sessions with experienced professional career coaches.’

Another way of helping develop skills is to involve the CFO in key projects in business planning, ‘like driving integration of systems in the information supply chain,’ Yeo adds.

For international companies like SingTel, employing finance professionals that can make contributions to their business is becoming a must, even though Koh acknowledges that, given the current tightness of the market, finding good candidates with the right mix of qualifications can be quite difficult right now.

Need

Professional recruiters agree that the employment market in general for qualified accountants has become active in Singapore, thanks to the economic recovery. ‘A lot of the banks, like Barclays, Royal Bank of Scotland and Credit Suisse, have moved back-office operations to Singapore, and with that there is a need for people in the finance area, whether accountants or financial analysts,’ explains Yvonne Goh, manager for commerce and industry at recruiting firm Michael Page International. ‘Meanwhile, we see a lot more regional offices in Singapore; companies are expanding and the emphasis on having good financial reporting has increased ever since Sarbanes-Oxley.’

The battle for talent extends to all accounting and finance functions. ‘We do find there is a challenge in hiring and retaining professional staff, in particular those with an accounting and IT background combination. Those are in great demand now because, with the demand for Sarbanes-Oxley, many companies have been building up their internal team and hiring from the Big Four,’ says John Chin, partner and head of risk advisory services at Ernst & Young.

The recently released Singapore Internal Audit Survey 2007 by Ernst & Young showed that one-third of organisations are currently operating below their budgeted headcount in internal audit and that 28% of organisations expect to increase their internal audit manpower by over 10% in the next two years, all of this in an environment where 31% of organisations are experiencing a turnover rate of more than 10% in their internal audit function. The resource constraint is affecting the completion of planned audits and, as a result, about 73% of organisations use some degree of third-party support in internal auditing, the survey found. ‘As a third-party provider ourselves we do see that trend,’ Chin says.

Goh points out that the issue is not so much on the supply side, but in finding the candidate with the right qualifications. ‘The need for finance people has increased, not just for the traditional bean-counting accounting role, but for business-oriented finance candidates who are able to partner the business on strategic issues. There is also an increase in demand for positions in internal audit, internal controls, regional tax and also financial planning and analysis. Finance is, more and more, seen as a key business partner to the business to help CEOs make better-informed decisions.’

Development

In the current, tight employment environment, professionals agree that companies must focus on career development to keep talent and reward accordingly. ‘The market is so buoyant right now that if they do not engage in an active partnership with their staff, they risk losing them to other people that offer better career prospects and better salaries,’ Goh warns.

For some companies, in-house training – especially offering hands-on experience in the various business functions – is increasingly the way forward.

‘We do believe that if the employee has the technical skills and exhibits the right attitude, we can train them by providing hands-on experience throughout our various units,’ Koh says, pointing out that SingTel offers thorough training by involving finance officers in various projects where they will be given exposure to the highest level of management thinking. ‘Getting feedback from various levels of the business enhances the thinking, in a way. People can be trained and shaped to develop certain skills. We found that after going through one full year of the whole business cycle, you should have a good understanding of the business units.’

But although many companies understand the need for offering competitive remuneration packages, as well as professional development opportunities to their employees, few actually have a well-developed programme in place, professionals warned.

Sonia Kolesnikov-Jessop is a freelance journalist regularly contributing to Newsweek and the International Herald Tribune.