“How do we ensure that the finance profession is fit for the future?” was the question posed by the Chartered Institute of Public Finance and Accountancy (CIPFA) as we sought to shed light on some of the challenges being faced by our members and identify some practical answers. To answer some of these questions, we were supported by Oracle, who hosted two roundtables bringing together public finance leaders to discuss the future of the profession: the first was in London, and the second was in Glasgow.
Three principal themes arose from the discussions. These were:
- how the finance profession should meet emerging challenges and opportunities in financial pressures, technology, and climate change;
- the skills needed by future public finance leaders; and
- how to attract future generations to the public finance profession.
The conclusions drawn from these themes were:
- the finance profession needs to demonstrate the wider value it offers, and new technologies and sustainability reporting should be embraced while being realistic about how we get from the here and now to future ways of working;
- softer skills should be nurtured in future finance leaders but fundamental financial skills are still important particularly in the early stages of careers; and
- to attract the talent of tomorrow, there needs to be a shift in how public finance as a career is perceived, and more should be done to demonstrate the positive social impact of the profession
Tackling Emerging Challenges
The key challenges of the future were identified as global financial and economic pressures, advancing technology, and climate change. The question is: how do we meet these challenges and what are the opportunities for change?
There are financial pressures in the public sector to redirect resources to front-line services and make savings. In this context, the finance profession needs to demonstrate the wider value it offers to avoid being pared back to a basic transactional service. Finance professionals add significant value to an organisation in terms of good decision making, strong governance and maximising financial resources. It is important that these skills are recognised.
As Alexander McNeill, Oracle’s Director of Finance Strategy and Transformation commented:
“We need to ensure that the finance professional has a rounded set of acumens: the political acumen; commercial acumen; business acumen; communication and presentation skills. It is not just the finance professional’s role to ensure good financial management, it is much wider than that.”
It was agreed that finance leaders should embrace the changes made possible by new technologies, while being realistic about the practical steps they can take to steer their organisations through change.
There has been considerable debate in 2023 around artificial intelligence (AI) models such as ChatGPT, and how new software can revolutionise work practices. Phil Beaumont, Principal Consultant at Oracle, had this to say about AI:
“There are a lot of things AI can do but there are definitely warning signs and things we need to keep an eye on. In terms of skills for the future and AI, it is about what questions to ask.”
However, AI still seems like a long way off, particularly where some finance work practices have not changed in a long time. There was a helpful reality check in the discussion from Richard McCallum, Director of Health Finance, Corporate Governance and Value, Scottish Government:
“We talk about AI, and that the finance role will be very different in the future. This seems to be at one end of the spectrum, and then there is the reality. For example, how some organisations prepare their accounts has not changed in the last twenty years. It feels like there is a quantum leap between where we are and what we've always done, and this vision for the future. What are the steps then that we need to take to move there?”
Along with the discussion on technology, it was agreed that future finance professionals will need skills in recognising and utilizing good quality data, and understanding how to turn data into useful information that tells a helpful story. As John Cornett, Executive Director of Audit Services at Audit Scotland put it:
“There is more data in the world than you could shake a stick at. The challenge is how we turn data into information that can be used to inform service development, growth, and sustainability. That is a certain skillset that sits neatly with a finance skillset in terms of being able to make the translation between data, information, and what that means in terms of resources and sustainability going forward”.
The discussions on data lead to sustainability reporting.and provided a natural segue onto climate change and the importance of the role finance professionals play in embedding sustainability into organizational culture. It was recognised that what gets measured matters and that reporting and monitoring this data will become increasingly important over the next five years but it is not without its problems. Martin Booth, Glasgow City Council’s Executive Director of Finance commented:
“The biggest challenge with sustainability reporting is there is no set measure. […] There is no standardisation. There’s reporting that has to be done but there isn’t a standard format for that. But who should develop that? It needs to be worldwide. Somebody has to take the lead on defining those standards.”
CIPFA fully agrees with this and has recently released a document exploring this point. You can read CIPFA's latest publication on Sustainability reporting in the public sector.
Steering the profession through the challenges outlined above requires strong leadership. It is in the gift of today’s leaders to identify the skills that will be needed in the future of the profession, and to nurture these skills in their organisations.
A finance leader from the Department for Education, asked:
“Are we doing people a disservice by only teaching them about accounting and not about wider issues such as big data, cyber risk and sustainability? What is it we really need to teach people in their public finance career?”
A recurring theme in the discussions was broadening the skills of finance professionals beyond the nuts and bolts of accounting. Participants highlighted the need for nurturing skills in ‘politics with a small “p”’, meaning softer skills in diplomacy, understanding workplace dynamics and cultures, and communicating and influencing colleagues and stakeholders.
Paul Clarke, Director of Finance at the London Borough of Islington, added: “CFOs need political awareness. They need to be influential and persuasive to get people to agree to things.”
Such skills are crucial in leadership roles and are not easily taught from a textbook. Rather, they are learnt with experience on the job from colleagues and mentors. It was noted that changes to how and where we work since the pandemic may have made it harder to gain such skills, so it was suggested that a more formal approach to mentoring could be a solution to fostering these skills.
However, some things should not change: the key principles of good public financial management should stand true no matter what the future holds. Equally, it was acknowledged that foundational financial skills are crucial, particularly for those in more junior levels, and that it is important to hone these skills before advancing to senior, strategic roles.
Acknowledging this fact lead to discussions of how the leaders of today can attract the talent of tomorrow.
The Future Generation of Finance Leaders
Participants believed that the sector needs to be listening to the upcoming generation about what it is that they want out of their careers, and to understand how young people are talking about roles and skills. It was agreed that there has to be a shift in how a career in finance is perceived.
The groups discussed the fact that there is often a derogatory view of finance professionals as dispassionate, backward-looking record keepers who stare at spreadsheets all day, looking after numbers that intimidate others. For current CFO’s this is far from the reality of the role which is in fact highly strategic and varied.
This perceived reality may come down to the fact that the diversity, creativity, and pathfinding elements of the work of public finance are not communicated effectively, and that changing perceptions begins by going out and communicating with young people who are interested in a career in finance or presenting a career path in public finance as a viable alternative to other sectors.
Using case studies of people who have had a successful career in public finance was also suggested as a way to market the profession.
To make public finance roles attractive, it was argued that organisations should emphasise the social value of what they do. Finance professionals have a role in shaping those public services that impact on everyone’s lives, and it was proposed that the sector should be more vocal about the value of their work. Delegates spoke about the need to demonstrate that public finance professionals should not be afraid to care, and that this could appeal to the next generation of leaders.
Contributors reflected on the fact that the private sector is better than the public sector at building a picture of what someone’s career could look like. One of the challenges in recruiting and retention is being able to map out a career pathway and offer people a richer career experience. A solution that got considerable traction in the discussions was that rather than the traditional vertical progression career model, there should be a greater emphasis on a matrix approach that encourages the development of diverse skills so that a candidate’s skill set does not limit them to a predefined silo of the finance profession.
The insights from the event have identified several useful areas that CIPFA will continue to explore. It is essential that as professional we continue to have an open debate about such important themes and always seek to improve the accessibility of our profession to as broad and diverse a range of individuals as possible.
The role of the public finance professional is a hugely rewarding and varied career. CIPFA offers unparalleled qualifications in public finance, shaping the workforce of the future.
CIPFA’s competency framework sets out an aid to planning career pathways and developing those who work in and alongside the public sector, and we are currently updating The Role of the Chief Finance Officer in Local Government to widen it out to the whole of the public sector.