Developing and Retaining Digital Finance Talent
How finance leaders can boost “intent to stay” among the people driving their digital transformation.
Employees with specialized expertise in digital technologies, who can build and maintain system capabilities, are vital to every organization. Finance teams are no exception. Finance staff with critical digital skills actively drive transformation within their department and their organization. CFOs who can retain these employees have a distinct advantage when accelerating digital transformation and capturing the benefits of emerging technologies.
Digital finance talent is relatively rare. Today, 83 percent of full-time equivalent (FTE) staff in finance are considered core finance talent, which is to say that they are experts in finance-driven processes and traditional technologies. Only 17 percent of finance departments’ staff represent digital finance talent, holding positions such as finance digital transformation leader, business intelligence (BI) developer, or finance technology lead. As companies are increasingly looking to technology adoption as the key to future success, CFOs want to expand their digital talent pool; on average, they expect digital talent to comprise 46 percent of their finance function by 2027.
However, reaching this goal may be difficult because retaining digital talent poses a particular challenge in finance. These staff have skills that are in high demand, and they are generally willing to explore the job market. Digital finance talent has higher attrition risk than does core finance talent, as they are 63 percent more likely to be looking for another job, and the digitally savvy employees are 69 percent more expensive to replace.
How Most CFOs Approach Retention of Digital Finance Talent
Failing to retain digital finance talent can pose a significant problem for CFOs. Attrition carries high costs in terms of not just recruitment expenses, but also delays in the completion of digital projects and loss of organizational knowledge. Still, most CFOs take a piecemeal approach to retention. Commonly used tactics include empowering digital finance talent with greater decision-making authority over projects, offering executive sponsorship, and providing better tools.
Such efforts are intended to translate into less resistance for those attempting to push forward digital initiatives, as well as development of a better work-life balance and an increased ability to pursue new opportunities and skills. The goal is to increase employees’ desire to stay within the finance function. In practice, however, the empowerment and strategies intended to boost retention can isolate digital finance team members from their peers within the finance function, leading them to feel alienated from the rest of the team.
Digital finance roles are unique in that they balance the dual responsibilities of finance and digital transformation. For digital talent brought into the finance function without a finance background, empowerment redoubles their focus on digital transformation over the finance side of the job. Even for those with a finance background, empowerment efforts typically shift focus toward the digital transformation responsibilities. As a result, digital finance staff begin to feel a stronger sense of identification with their digital transformation role at the expense of the finance role. They may lose their sense of belonging within the finance function, which can alienate them from their colleagues.
This situation is exacerbated if core finance team members struggle to relate to digital transformation work, and if much of the digital transformation work is disconnected from finance’s day-to-day activities. These two factors can lead digital finance talent to engage in negative behaviors that counterbalance the positive impacts of empowerment.
Moving from low levels of empowerment to high levels can more than double digital finance employees’ intent to stay (from 24 percent to 57 percent). But intent to stay does reach a plateau, as giving digital finance staff too much special treatment can feed their alienation, which can drive an intent to leave.
CFOs cannot afford to overlook the most critical element driving digital talent retention: a sense of belonging to the finance function.
A More Effective Approach to Retention
There are three key measures finance leaders can take to battle alienation among digital finance talent:
1. Build a shared sense of purpose through goal setting.
CFOs’ efforts to build a shared sense of purpose within finance often boil down to communicating the goals of the function in a way that staff can relate to. Finance executives need solid approaches for cascading goals down the organization, as well as for effectively soliciting input from contributors and adjusting operational goals accordingly.
Successful goal setting for digital initiatives is different from other finance goal-setting processes. For one thing, most digital initiatives require a significant amount of change in the way the organization does things. For another, digital priorities shift quickly, requiring greater team coordination and alignment within the function. Lastly, within many digital initiatives, individual contributors at lower levels of the organization may have significantly more subject matter expertise than their managers and leadership, in contrast to core finance initiatives. Cumulatively, these differences require rethinking finance’s goal-setting process.
One approach for strengthening the identification of digital finance talent with the broader department is objectives and key results (OKR) goal setting. OKR is a flexible goal-setting framework that facilitates a more bottom-up approach while maintaining the guardrails necessary for alignment throughout the finance organization. It works by splitting digital goals into objectives and key results. This helps cascade down high-level objectives, while allowing individual teams greater say in determining which key results will best contribute to organizational objectives. And teams’ contributions, in turn, help ensure that digital finance team members can identify with finance’s digital strategy, strengthening their sense of purpose and belonging in the function.
2. Provide experience-based (not role-based) career paths.
Clarifying the career possibilities for digital finance talent presents a challenge for many CFOs. The future of digital work in the finance function is evolving, and digital finance team members can apply their skills in a variety of ways.
The key is to operate with flexibility, putting the development of digital finance talent at the forefront of career conversations. By framing future possibilities within the function in terms of experience and knowledge gained, rather than roles, CFOs can build more resilient career paths that can easily be updated in response to evolving technologies and can be customized to account for the diversified interests of the digital finance staff.
Leading finance organizations have established experience-based career pathing frameworks for digital finance talent. These frameworks gather the various experiences available for digital finance talent within the function and organize them in a logical progression. The frameworks also provide greater visibility into career opportunities for digital finance talent and give managers a more realistic structure for career conversations. Experience-based frameworks successfully show not only vertical progression opportunities but also horizontal and diagonal opportunities.
3. Build a strong sense of belonging.
Data shows that the most effective way for CFOs to increase digital finance employees’ intent to stay is by increasing their sense of belonging. While creating a sense of belonging is important for every employee, it is particularly important for digital finance staff, as they are likely to develop a distinct and separate identity from the rest of the finance function.
To create this sense of belonging, CFOs should focus not only on employees’ purpose and possibilities, but also on their interactions with their peers. Finance leaders should deliberately foster kinship between digital finance talent and colleagues in the finance function. They should take steps to protect the acceptance, inclusion, and identity of digital finance workers within the function, providing opportunities for them to connect and form relationships with their peers.
CFOs can significantly improve digital finance talent’s intent to stay by strengthening these employees’ identification with finance’s digital transformation goals, their understanding of the possibilities available in the function, and their kinship with core finance staff. From there, they can turn that intent to stay into faster and better execution of digital transformation initiatives over the long term.