The business world is witnessing one of the biggest employment churns in recent times. According to a recent study, about 4 million Americans quit their jobs in July 2021. And, this is only the tip of the iceberg, as 1 in 4 employed individuals plan to seek a new job with a different employer in 2022.
Causes of the great resignation and why should mid-market CFOs care?
Motivation is almost always the primary reason why employees opt to leave their current organization. While the underlying reasons or motivations for employees could be different across geographies, the reason for this sudden surge in attrition right could be any of the following triggers –
Need for better work-life balance
Low net-new learning and repetitive mundane work
Lack of motivation
Increased work pressure
Lack of engagement and communication
Unheard employee voices or opinions
Lack of recognition and appreciation
These triggers have further ballooned into critical flashpoints for employees, especially in the aftermath of the pandemic. A number of employees feel disconnected from their role, as well as their departments, leading to them looking for greener pastures.
Who really is quitting and where are they headed?
Most job-seekers are a mix of mid-career employees as well as millennials. With the recruitment market picking pace, these individuals are now able to seek opportunities that suit their preference, competency, and interest. The emergence of start-ups that are predominantly digital-first has gained immense momentum in the past 2 years. In fact, as per a recent study, about 4.3 million start-up businesses filed paperwork to start operating in 2021.
It’s also important to understand the reasons for this trend across different countries. For example, in India with the current transformation around a lot of startups being evaluated as unicorns, has become a serious area of opportunity for employees looking for a change.
And job seekers are comfortable leaving traditionally large companies for startups. Similarly, it might seem like a great resignation for these traditional companies in the US, at the grass-root level, it is just people looking for opportunities that challenge them to outperform and are rewarding.
For organizations facing a severe attrition crisis, now is the best time to engage with their employees, gauge their level of satisfaction with the organization, understand the pain points and chalk up a win-win solution to boost retention.
And, as the great resignation continues to impact a number of businesses in 2022, the CFOs office too hasn’t been spared. In fact, as per a recent study, CFOs are struggling with a lack of talent quality and availability.
The challenge for the CFO Office: No automation – only spreadsheets all over
Finance transformations are scattered and complex, especially in the mid-market business spectrum. Unlike enterprises that have the wherewithal and resources to have streamlined processes, mid-market businesses manage their tasks with limited resources. With mid-market businesses relying on archaic manual-based AR processes that were not possible to execute remotely, there is little motivation for employees to continue working in such scenarios, and instead look for opportunities that foster efficiency, and learning.
If we look at the office of the CFO, the accounts receivables(AR) process is one function which is characterized by mundane and repetitive clerical tasks. AR is typically driven by sticky notes, notepads, numerous spreadsheets, and communication restricted to telephone reminders. And none of these tasks are helping AR managers do their jobs efficiently.
The preference: Jobs that add value vs transactional tasks
As a CFO, if you are interviewing a prospect for a job that’s largely manual based, your digital-first candidate may find it hard to associate with an opportunity that lacks value-add for him or herself and the organization. This is exactly where CFO offices need to switch to automation for their AR processes. CFOs can automate defined key tasks and align the efforts of the employees towards creating value. Mid-market CFOs can also keep their teams away from transactional work, help them achieve greater value for themselves and the organization and avoid the chances of great resignation at their office.
On-cloud CFO office infrastructure and employee retention
The pandemic was an eye-opener for mid-market businesses who had not considered automation in their AR infrastructure up until this point. They needed their employees to receive checks, scan, and record payments manually. Or in some instances, they would need to review a stack of invoices, correct them or reconcile it against an invoice, and make manual entries in the system.
These activities had to be repeated over and over again for each invoice and payment entry. Only because such mid-market CFO offices were not equipped with the right kind of tools, technology or automation solutions that enables your team to efficiently work from anywhere they want.
By investing in the right automation strategy that streamlines processes, improves efficiency and fosters remote operation, mid-market CFOs can drive the additional benefit of significantly reducing attrition. This allows the CFO’s team to take the tasks up the value chain so they can both create and capture value for the organization. This is what exactly culminates in job satisfaction and enhances chances for employee retention.
The double-edged sword: Retaining talent vs hiring new talent
A lot of mid-market organizations are growing at 30%+ CAGR and are growing big. And as they grow, one of the fundamental challenges they face, including our personal experience at HighRadius, is getting the right talent at the right time. Hiring the right talent goes hand-in-hand for aspiring businesses to become big – and it is one of the biggest challenges that mid-market organizations face at the moment. The unprecedented growth fuelled by the pandemic or even otherwise are pushing businesses to increase their hiring efforts to sustain operations.
Let’s imagine a case in the office of the CFO – where automation is limited and business is booming. This means an increase in the number of invoices, and payments coming in, onboarding of new customers and much more. All this, with your limited resources(—coupled with the inability to scale your manpower because you’re stuck in an era of the great resignation(—where the right talent is scarce and expensive.
And this here, is the recipe for failure. Because, you are unable to retain employees, unable to hire quickly and cost effectively, as you have not invested in automation. The best way to overcome this, would be to bring the mindshare towards automation for mid-market CFO offices.
Great Resignation or not: It’s time for mid-market CFOs to automate their back-office operations
As a mid-market CFO in a growing business, you need a focus on how you can leverage digital transformation. And, if your business is growing at a fast rate, then you need to think like an enterprise and act like a mid-market company.
It’s time to look beyond the obvious, and solve the problems which you probably thought weren’t crucial for your office as a mid-market organization. Next, get software solutions built by leading software vendors that are focused on solving the gaps that exist in your finance function operations.
Such specialized software can solve your exact problem and can help you improve your processes drastically, without having to deal with any consultants for implementing solutions, yet get you the results you want.
Furthermore, as a business, focus on the areas that you want to fix. For example, if you wanted to enhance the efficiency of your accounts receivables function, you could begin by focusing on the following areas:
Take day-to-day AR data driven decisions
Simplify credit, collections and deductions processes
Get a 360-degree view of your office’s AR health
Reduce DSO and ADD
Apply checks against invoices automatically
Enhance team productivity
Once you’ve aligned the focus areas with your broader stakeholders, look for solution vendors that can help you achieve your goals with minimal business disruption and low-to-nil internal IT support dependencies. You can check out the RadiusOne AR Suite by HighRadius which meets all these requirements. And it is an AR automation software that supports your organization to transition from a mid-market business to an enterprise.
So great resignation or not, the time for mid-market CFO office transformation is now, and is happening. So, don’t get left behind, request a consultation today and solve your underlying business-IT challenges with RadiusOne AR Suite.