Posted by Tim Hird on Monday, July 6, 2015 - 09:23
As businesses grow and become more complex, so do accounting and finance practices. One way to ensure your department is operating as efficiently as possible is to compare your finance operations to your peers’.
The Benchmarking the Accounting & Finance Function 2015 report from Robert Half and Financial Executives Research Foundation includes data from nearly 1,400 U.S. and Canadian executives. Financial leaders can use the information to see how their operations measure up and identify areas where they may be able to make improvements.
Following are highlights from the report focusing on staffing trends, a helpful point of comparison as you evaluate your personnel strategies:
1. Staff additions in accounts receivable and general accounting address business growth
As the economy improves and businesses expand, companies are reallocating and reinforcing their human resources to better meet new needs. The research found firms are devoting a greater percentage of their staffing resources to accounts receivable and general accounting. The most populous areas within finance also include accounts payable and financial reporting.
2. Full-time staff costs are high in larger companies
The median cost — base salary, bonuses and benefits — of internal financial staff is 2 percent of revenue. This figure has held steady for U.S. companies but reflects a continued increase in Canada, up from 1 percent in 2013 and 1.5 percent in 2014.
But even in the United States, the compensation bill for larger companies is getting larger. In fact, for companies with revenues between $500 million and $1 billion, the median cost doubled, increasing from 1 percent in 2014 to 2 percent this year.
The likely reason for this increase, according to interviews with respondents, is the competition for highly skilled staff in accounting and finance, which has forced companies to spend more to land and retain top talent. Increasing healthcare costs also could be having an impact on U.S. companies.
3. Businesses of all sizes rely on interim professionals
The majority of large companies — and more than two-thirds of the largest firms — work with project professionals. The mix of interim and full-time accounting and finance staff, however, is greatest at small businesses. At companies with less than $25 million in revenue, 20 percent of the workforce is made up of contingent professionals.
Working with interim professionals and consultants allows companies to quickly access needed subject-matter expertise and assistance with key initiatives, bring in support for peak work periods, and evaluate potential full-time hires.
4. Workweek hours remain steady
Holding steady from 2014, U.S. managers work an average of 47 hours per week and non-managerial staff work 42 hours. In Canada, managers put in approximately 44 hours per week (down from 46 hours last year), and non-managers work an average of 40 hours.
During peak periods in both countries, the hours per week rise, though they have declined for the third year in a row. Respondents to the 2015 Benchmarking study attribute this trend to an improved economic climate, which is giving hiring managers more flexibility in their budgets to hire supplemental staff during peak periods and when staff take parental leave.
5. Retention tactics are becoming a higher priority
The challenges and costs of hiring, especially for managerial positions, have many companies reinvigorating their retention efforts. To keep top performers satisfied and in-house, companies are prioritizing promotions, succession planning and career development.
6. Evolving demands are requiring specialized expertise
Changes in technology and regulatory issues are adding to the finance function’s responsibilities, requiring professionals with the corresponding specialized expertise.
The report indicated some hesitancy on the part of executives to fully embrace cloud computing. However, 51 percent in the United States are using the cloud or plan to. Companies will need professionals who can help with the transition and also enhance data security.
Companies of all sizes face mounting regulatory compliance issues. Roughly seven in 10 U.S. financial executives (72 percent) said their compliance burden will increase over time, and just 2 percent foresee a decrease. In Canada, 66 percent anticipate an increase, with 3 percent expecting a decline. Compliance experts are needed as companies seek to meet the evolving mandates affecting them.
Benchmarking accounting and finance functions may be challenging for busy executives. But without this process, a company will likely have difficulty making informed decisions and moving forward. By taking the time to assess how their department compares to those of similar organizations, finance managers can make better use of their resources to become more efficient, productive and innovative.
To view the comprehensive research findings, which also look at areas such as financial systems and compliance, download Benchmarking the Accounting & Finance Function 2015.