Reward and retention of finance professionals

In times of financial constraint it can be hard to attract and retain appropriately qualified and experienced professional staff. Very often well qualified employees not only have a good understanding of their market value, but are increasingly prepared to move to other organisations if they feel their talents and experience are not being fully recognised. While this is a problem for smaller and medium enterprises, these challenges are particularly acute in the public and charity sectors, where organisations tend not to be willing or able to match the pay levels seen in large corporations or professional firms.

In the public sector and charitable sector, organisations very often rely on employees being attracted by some other less tangible factor than financial reward. They often appeal either to notions of public service, or present the prospect of employment with them as an opportunity to ‘do good’. This is often accompanied by the offer of a better ‘work-life balance’ than is normally found in big companies or firms. Furthermore, in environments where hard professional skills are in short supply, there is also the prospect of being able to have a disproportionate effect on the operations of the organisation.

In the right circumstances, these sorts of public interest organisations can be satisfying places to work, especially when finance professionals are brought into the heart of decision making and can see their advice and skills having significant impact. There are, however, sometimes some challenges to offering careers that are sufficiently satisfying to overcome what can be significant disparities in remuneration. These challenges can sometimes become problematic when the promised work-life balance turns out not to be so very different from the private sector and the ability of professionals to have impact or ‘do good’ is blunted by bureaucracy or out-dated management practices.

The flip side of having specialist and relatively rare skills can also be there is no dedicated career structure or support available in smaller organisations. Even in larger public sector organisations, very often career structures are designed to suit staff with more generalist skills. Sometimes these do not take account of the needs of specialist or expert members of staff. This can give rise to a number of difficulties in recruiting and retaining specialist staff. Organisations that mainly employ generalist staff often base their employment offer around several assumptions, which are that:

• skills are substitutable and that most roles can be performed satisfactorily by bright and enthusiastic amateurs who are prepared to apply themselves;
• training and development opportunities, including fast-track management schemes are geared up to the needs of generalist staff;
• technical or specialist staff are often viewed as too narrow in their expertise to be suited to senior management roles requiring a broad grasp of the organisation and wider context in which it operates; and
• specialist staff are an ‘add-on’ to the organisational structure, so exist in an advisory capacity rather than being part of the core decision-making process.

While these factors do not generally act as a brake on recruitment they can cause problems for retention by combining to produce an environment where professional employees do not feel valued. When these environmental factors are added to lower levels of financial reward, then it can be extremely difficult to retain employees with strong professional backgrounds.

Consequently, in order to support effective recruitment and retention of finance professionals into public sector or charity roles it is important for employers to think broadly about both reward and recognition.

Reward

Reward can come in many forms beyond the purely financial – the sense of doing something worthwhile can provide satisfaction far in excess of financial rewards. The satisfaction that comes from personal development and growth is another strong motivator. These attractions mean that finance professionals do not necessarily expect to be paid in line with the top opportunities, but they must actually exist in reality.

Consequently, when designing roles, it is worthwhile for employers to carefully consider whether the main attractions of careers in the public or charitable sectors are present in the day-to-day working environment. For example, financial roles in government are attractive because of the overview of the public finances they offers, the ability to feel involved in activity that is of national importance and the sense of doing something worthwhile of benefit to the nation. Particular things to consider are:

• Job satisfaction – one of the most important factors of employee satisfaction in any job is the sense that what you are doing is worthwhile.  In situations where other types of employment can offer better financial reward, this is often the post important factor in retaining staff.
• Variety of experience – public sector organisations can be large, so they can also offer staff personal development through the variety of roles and activities they undertake. Being able to offer finance professionals the opportunity to work in other areas of the organisation as part of an overall finance career has the benefit of broadening their skills. It can also give them a better understanding of the business activities of the organisation. All of which increases their value to the organisation.
• Personal development – the nature of their expertise means that finance professionals have a need to undertake continuing professional development to maintain their qualifications so offering training and development opportunities is attractive to them. Finance professionals also tend to welcome opportunities to maintain and develop their wider professional and personal skills so provision of training targeted at them (eg, commercial skills for finance professionals) can considerably enhance the employment offer.
• Career progression – finance professionals tend to enjoy working in clear and structured environments so value the ability to look ahead and understand the opportunities for progression and the criteria for advancement. A clear ‘finance’ career path with opportunities for progression and career development will help to recruit and retain finance professionals.
• Remuneration – lastly, it is important to remember that, as one of the ‘hygiene’ factors identified by Maslow, the financial package still matters! The skills of finance professionals are usually transferrable between the public and private sectors, so if there is a significant difference in remuneration it is very difficult to attract or retain sufficient skilled people. Consequently, public sector employers do still need to recognise that while they don’t have to offer a reward package in the upper quartile, they do have to keep the level of overall reward close to the median ‘going rate’. 

Recognition

An important environmental factor that makes employees feel valued in the workplace is recognition. Recognition in terms of public acknowledgement that what someone is doing is worthwhile, valued and an important part of the activities of the organisation they work for is a powerful tool.  Appropriate use of recognition can make professionals feel involved and committed to an organisation and build a sense of being part of a shared undertaking.

There are a number of components of ‘recognition’ which are worthwhile considering:  

• Status – finance professionals need to be recognised as an integrated part of the management function of any public sector organisation. This means they need to be treated as full members of the management team and given suitable job titles, roles and responsibilities that affirm their status as part of the management team.
• Inclusion – it is important to include finance professionals’ core business activities such as strategy forming, planning, budgeting and review.  Bringing finance skills to these activities is not only of enormous benefit to the business, but it also means that finance professionals feel valued and included as part of the management team and gain a strategic understanding of business.
• Representation – finance professionals should be included as full members of management boards and committees with an equal say to their peers. This helps them feel valued by ensuring their contribution is taken into account in decision-making processes and increases their feeling of identity with the organisation.
• Work-life balance – the quid pro quo for taking up a role in the public sector that is less well paid than the private sector, is that usually a public sector employer recognises that lower levels of reward are accompanied by a better work-life balance for employees. This can extend to offering certainty about working hours or opportunities for flexible working, which are often attractive to more experienced professionals with child-minding duties and can be a significant factor in retention.
• Working environment – public sector employers also need to ensure that the status of specialist employees is recognised through their workplace meeting reasonable standards of convenience and comfort. This extends to providing them with the right tools for the job in terms of information technology and ensuring the environmental conditions do not distract staff from being able to focus on their work.

Of course, none of these factors on their own represent a panacea for the challenges of recruiting and retaining professional staff in lower pay environments. If, however, an organisation can create a working environment where a combination of them are present, it should go a long way to helping to recruit and retain staff.

Public Sector Group, March 2016

This article was first published by the Finance and Management Faculty in the March 2016 report “People and Skills”.