Report Finds Finance Function Costs Increasing as Talent Shortages Intensify
MENLO PARK, Calif., and MORRISTOWN, N.J., June 5, 2015 /PRNewswire/ -- Costs associated with the finance function are rising for many firms, according to a new survey of executives from finance and accounting departments at public and private companies in North America. The research found that at companies with revenues between $500 million and $999 million, the cost of the finance function as a percentage of revenue rose from 1 percent in 2014 to 2 percent in 2015. At companies with $1 billion to $4.9 billion in revenues, median costs grew to 1.4 percent from 0.9 percent in 2014.
Executives interviewed for the study noted increased costs are in part a reflection of the recruiting and retention challenges many companies are facing and the subsequent need to raise salaries and provide increased perks.
The information is part of the sixth annual Benchmarking the Accounting & Finance Function 2015, a study from global staffing firm Robert Half and Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI). In addition to surveying finance executives, the groups also conducted in-depth interviews with financial leaders for the project.
"One of the trends that stood out in the research was the increased difficulty executives reported in recruiting skilled employees," said Paul McDonald, senior executive director, Robert Half. "Companies competing for top talent, as well as those looking to retain star performers, are boosting compensation packages. In some cases, higher costs stemming from healthcare reform might also be a factor in rising finance function costs for U.S. firms."
Other findings include:
- More than half of respondents surveyed said they still reconcile accounts manually -- 54 percent of U.S. firms and 55 percent of Canadian companies. This is a decrease from 59 percent and 66 percent, respectively, last year.
- Nearly half (49 percent) of U.S. companies and 55 percent in Canada report they don't use cloud-based solutions for their finance functions and have no plans to do so in the future.
- The largest companies surveyed (those with revenues of $5 billion or more) were most likely to use temporary or project professionals, with two thirds (67 percent) saying they employed interim staff. Sixty-one percent of companies with revenues between $500 and $999 million employ these professionals.
"Benchmarking data provide companies with important insights into what their peers are doing when it comes to practices such as closing the books, using technology, managing compliance and staffing their departments," said Mitch Danaher, FEI Board Chairman and Deputy Controller, General Electric Co. "Financial leaders can compare their performance in these areas both quantitatively through our survey data and qualitatively through accompanying interviews with financial executives. In this way, finance and accounting departments can also identify ways in which they can make better use of resources, improve their effectiveness and add even greater value within the finance function."
About Benchmarking the Accounting & Finance Function 2015
The report provides benchmarking data based on input from nearly 1,400 executives from finance and accounting departments at public and private companies in the United States and Canada. Executives were asked questions related to five key operational categories: workforce management, accounting operations, financial systems, sourcing, and internal controls and compliance. The results are designed to provide a framework for developing best practices and improving operational efficiencies.
Robert Half and FEI will host a June 11 webinar, 1 p.m. EDT, to discuss the report findings. The presenters include McDonald and Thomas Thompson, Jr., senior associate, research, FERF, as well as a panel of CFOs from leading companies. The speakers will share strategies for today's finance leaders.
Register or learn more about the webinar. The complimentary session qualifies for one unit of continuing professional education (CPE) credit.
About Financial Executives International (FEI)
Founded in 1931, Morristown, N.J.-based FEI is the leading advocate for the views of corporate financial management. For more information, visit financialexecutives.org.
About Financial Executives Research Foundation (FERF)
Established in 1944, Financial Executives Research Foundation (FERF) is the non-profit research affiliate of Financial Executives International (FEI). FERF's mission is to provide knowledge and insight that enable informed decision-making by senior-level financial executives and their organizations through its unbiased research. FERF proudly celebrates its 70th anniversary this year.
About Robert Half
Founded in 1948, Menlo Park, Calif.-based Robert Half, the world's first and largest specialized staffing firm, is a recognized leader in professional consulting and staffing services. Find more information at roberthalf.com.
SOURCE Robert Half