Financial sector lacks talent management strategies
Written by The Edge Wednesday, 22 June 2011 11:21
KUALA LUMPUR: A survey by the Association of Chartered Certified Accountants (ACCA) shows that the majority of financial organisations lack functional and effective talent strategy programmes.
The ACCA survey, conducted jointly with KPMG, was entitled Maximising people power: effective talent management in finance. The survey report was launched on May 25 and was a follow-up on an earlier survey on talent management practices across the finance profession conducted in March 2010.
The latest survey revealed that less than 20% of financial organisations had a talent strategy that integrated talent identification, development, deployment and retention. It also stated that most talent management practices were informal, run in isolation and based on functions rather than run as a part of an integrated wider plan.
According to the report, the lack of investment in talent management in the finance sector raises a concern. The report stated that the value of the role of finance professionals has been heightened by the recent economic crisis and the next decade will present an opportunity for these professionals to help create and sustain long-term value for organisations. Finance talents are an important part in the shaping of new finance functions.
The executive summary of the survey stated that “in order to improve finance function effectiveness, chief financial officers typically consider restructuring finance operations... However, talent management must be incorporated into any planning for finance function restructuring. The success of moves to streamline finance activity, reduce transaction costs or improve the ability of finance to provide insight to operational managers depends ultimately on the availability of individuals with the right mix of knowledge and experience,
“This is facilitated by effective talent management. The future demands and needs that will be placed on the finance function will require differences in the way talent is identified, determined and developed.”
What the report highlights is the difficulty CFOs face in retaining talent. The survey was conducted in the wake of the World Bank’s findings that Malaysia’s aspirations of becoming a high-income nation will be jeopardised unless it actively retains or attracts talents. A shortage of talent in the finance sector will affect the restructuring, reshaping and development of the finance sector.
“Some 20% of graduates have migrated or sought employment in other countries, adversely impacting the quality of the local human capital stock. The accountancy sector’s growth has been stymied by the shortage of talent, with audit being the worst hit,” said Helen Brand, chief executive of ACCA.
KPMG Malaysia managing partner Mohamed Raslan Abdul Rahman observed that talent management in the country is more necessary than before.
“This was most recently highlighted in the World Bank Report which stated unequivocally that for our nation to go forward and attain the status of a high-income economy, the retention of human capital is imperative.
“Brain drain is not a novel term. It has long been a topic of heated debate and controversy in the region and it is a particularly pressing issue for the accountancy profession. According to Malaysia’s Economic Transformation Programme (ETP) handbook, our country currently has but 83,000 finance and accounting professionals and this severe shortage of talent is impeding the sector’s growth. The reasons cited for the exodus are manifold, such as superior wages, career prospects to the quality of life offered by other countries,” said Raslan at the launch of the report.
The joint report highlighted that in the light of these grave circumstances, organisations should invest in talent management strategies. The report recommended that an integrated talent management approach that encompasses eight key components beginning at defining real talent. Organisations should then recruit individuals with the right skills and development potential. Competency frameworks should then be put in place to define talent requirements.
Further to that, organisations should invest in targeted development of their talents to ensure resources are focused on developing talent for critical roles. Talent should be equipped with comprehensive training, with a range of development options and given a structured career path to help them align their growth and development with organisational needs.
“Integrated talent management sits at the heart of finance function effectiveness and is therefore of critical importance. It is an essential requirement if finance functions are to meet the changing and challenging demands made of them, and ensure they have appropriate professionals with the right skills and competencies available in the right place at the right time. This is a key factor in supporting the value creation cycle, whereby finance professionals apply their talents and skills to support organisational performance and enable value to be sustained for the long term,” the report concluded.
