Most leaders assume pay is the main element that incentivises high-performing finance executives, but research shows that's not the case.
According to studies done by recruitment firm Hays Accountancy & Finance, having the right processes in the business to support staff to do their job effectively, often matters more than money.
Hays' regional director David Cawley says one of the best ways to incentivise staff is to recognise a job well done - and by saying 'thank you' for hard work.
“90 per cent of employers say that is a key strategy for them to aid staff development and retention," he says.
Cawley says offering flexible work practices and supporting work-life balance are other important ways to incentivise staff.
“The advent of remote working, being able to log on from home, means the finance function is no longer chained to the office. Most forward-thinking bosses are allowing people to have more flexibility in their work," he says. “That aids employee retention and career planning for people who either have other priorities in life and want to mix it up, or who have young children, or they job share or maybe do not work full time," Cawley says.
Career path plays a part
Aside from flexibility, Cawley says it is particularly important that leaders communicate business values so that members of the finance function understand the part they play in the business.
Another essential motivator is offering a clear career path for staff, especially in a world that is being transformed by new technologies.
CFOs that offer their staff the opportunity to develop their professional skills could give themselves an advantage in attracting and keeping great staff who want to stay with their firms.
“Rotating staff around different areas of the finance function can also help staff equip themselves for tomorrow, which is another way to keep the team pumped up," Cawley adds.
When it comes to pay, Hays' research shows that while yearly salary reviews have a level of importance, performance-based bonuses are not as important in the finance team as the organisation's objectives.
For instance, its research shows 58 per cent of employers and 75 per cent of employees believe performance bonuses are important.
In contrast, when asked about clear communication of the organisation's objectives and strategy, 87% of employers and 94% of employees said this was important.
“Pay is not as much of a priority as understanding your goals in the organisation, what role you play and how you help the organisation achieve its aims," Cawley says.
This is a positive, given Hays' research shows salaries are stagnant.
According to the Hays' 2017 Salary Guide, a total of 11% of employers are not offering salary rises in their next performance and pay review.
Moreover, salary increases on offer will be small. The survey shows 65% of employers will lift salaries by less than 3%. Almost a fifth (19%) say they intend to raise salaries by between 3% and 6%, with only a paltry 7% expecting to lift salaries by more than 6%.
More than money
Andrew Brushfield, Director of Robert Half Australia, says providing incentives to the finance team is an evolving area. He agrees that pay is only one aspect that drives performance.
“Back in the day, incentives would only be for the top end of the finance function and were not necessarily spread all the way down the team," he recalls.
“What we're seeing more recently, is that all levels have goals related to incentives, giving them an extra reason to put in the hours," he says.
But Brushfield agrees it's not just money that motivates employees.
“The sales side of the business might have significant short-term financial incentives. But because of the nature of jobs in finance, it's difficult to do that," he says.
He sees far more rigorous recognition and flexible work environments, which create a more open environment and a culture of autonomy.
“Obviously, you need to pay at the minimum what the market is paying; but you can do other things to incentivise people to hit their deadlines."
Like Cawley, Brushfield believes offering flexible work practices has a huge impact on engagement and retention of people.
“Right now, one of the hardest things for finance teams is to find really good people," he says.
“If you've got really good talent and you lose them, it's primarily because of things you can control. So, it's up to the business to assess why this is happening and make changes to stop it," he advises.
According to Hays' 2017 Salary Guide, mid-management, technical and operations staff are the most difficult to recruit, as are mid-level accountancy, finance and IT professionals.
Additionally, 65% of employers, versus 60% last year, are worried about skills shortages.
For businesses that do offer finance staff incentives, Brushfield says long-term rather than short-term bonuses are more prevalent.
“We're seeing lots of time and effort put into creating programs that encourage employee engagement and retention. Wellness programs, health checks and other incentives are viewed as more important than short-term financial incentives."
However, Brushfield says what ultimately motivates people is the person to whom they directly report.
“It gets down to the person, assuming all other aspects are equal, and the business has competitive remuneration structures and meets its workforce's expectations around flexibility, wellness programs and study options,” he says.
“We're getting to a stage where things are expected. So, the most important thing to attract people, assuming all those things are in place, is the person and the team they work with."
- Even when salaries are stagnant, non-monetary rewards can be equally as important as financial incentives.
- Staff can be incentivised by having a clear purpose at work rather than incidentals such as free lunches or gym memberships.
- Most staff assume they will be able to take advantage of flexible workplace practices and work remotely.alaries are stagnant, non-monetary rewards can be equally as important as financial incentives.