Tague_Strategic Finance Article

June 2015 / STRATEGIC FINANCE / 39

FILLINGJOBSWISELYHow companies use Talent Supply Chain Management to link human capital to business needs.

ILLUSTRATION BY ROBERT PIZZO/WWW.ROBERTPIZZO.COM

By DOUG ARMS AND TONY BERCIK

40 / STRATEGIC FINANCE / June 2015

In the case of Boeing’s 787 Dreamliner, more than you’dimagine. Boeing uses more than 1,000 suppliers to deliverthis airplane’s specific parts—a number that’s so high be -cause the company focused on finding the highest- qualityparts instead of the lowest-cost supplier who tried to doeverything. As a result, the overall product is of a far betterquality than it would have been with a one-size-fits-allapproach in which a single supplier provided all the parts.For years, companies like Boeing have employed the

principles of supply chain management to enable leaneroperations and position themselves more competitively inthe marketplace. Supply chain management is the processby which the flow of materials—including raw materials,work-in-progress inventory, and finished products—movesfrom the supplier to the consumer by means of an effectiveinfrastructure that allows for the synchronizing of supplyand demand.Because it’s adaptable, effective supply chain manage-

ment reduces inventory and enables companies to forecastpeaks and lows in demand, thereby facilitating a lean, agile system of input and output. As a result, companiesminimize the possibility of a surplus of inventory anddecrease the resources necessary to purchase and store thisinventory—all while maintaining an open supply line to thematerials they need. In short, supply chain management isabout being as effective and streamlined as possible whileenhancing quality and reducing risk.

Talent Supply Chain ManagementIt’s also entirely possible to apply the principles of supplychain management to the supply and demand of financeand accounting talent. After all, for most companies, talentis the number one resource and the foundation of theircompetitive advantage. Using the experience of Boeing asan analogy, talent supply chain management (TSCM)involves using the right supplier for each specific andunique hiring need as well as establishing the right supplychain implementation, coordination, and, when necessary,remediation.With an established infrastructure of talent pipelines

and oversight of how talent needs to be deployed to meetbusiness objectives, companies can optimize their talentstrategies, maximize the potential of their human capital,and minimize waste. In other words, by using TSCM—alsoreferred to as “holistic” or “integrated” talent management—companies can create strategies that encompass talent

What do building an airplaneand finding finance andaccounting talent have incommon?

Over the next 15 years in the U.S. alone,

10,000workers will turn age 65 every day.

Source: Pew Research Center

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across all labor categories and that are aligned with busi-ness goals.As Teresa Carroll, senior vice president and general

manager at KellyOCG, points out in “Talent Supply ChainManagement Readiness” (http://bit.ly/1PCP1DC), mostcompanies that utilize TSCM still focus primarily on meet-ing their current talent needs. But that approach fails toharness the full power of TSCM, which allows companies toforecast their talent needs in one year, two years, or furtherinto the future. By assessing what type of talent they willneed in order to reach specific business goals and combin-ing that information with data about workforce trends,organizations can pinpoint talent gaps before they occur andcreate strategies to deal with them. Tapping into this predic-tive ability is the key to success in today’s evolving work-force where skills shortages, work preferences, andincreased globalization play interrelated roles.

The Evolving WorkforceIn this competitive labor market, companies are strugglingto come to terms with an evolving workforce. Prompted inlarge part by changing attitudes toward work because of theinflux of Millennials and the impending retirement of thou-sands of Baby Boomers, as well as technological advance-ments and increased globalization, the configuration ofavailable labor categories is changing.Whereas employees used to remain with a single

employer throughout their careers, today’s talent is muchmore mobile and independent. Recent research from KellyOCG shows that 65% of finance workers plan to lookfor a new position in the upcoming year. Moreover, 52%would give up higher pay for a greater work-life balance.These statistics indicate that, unlike previous generations,today’s workers are more likely to actively seek opportuni-ties that are a better match for their career objectives andlifestyles. And as Rob Asghar explains in his January 2014Forbes article, “What Millennials Want in the Workplace(And Why You Should Start Giving It to Them)” (http://onforb.es/1zWd2Uu), the youngest generation of workersdoesn’t just want a good work-life balance; they wantwork-life integration because they realize how tightly workis woven into the fabric of their lives. While they’re highlyaspirational, they want to make a positive impact on theworld through their work—and they don’t necessarily wantto do that in a conventional hierarchical workplace.At the same time, many Baby Boomers reaching retire-

ment age aren’t prepared to leave the workplace completely.Whether it’s because of financial pressures or simplybecause they don’t want to stop working, a significant por-tion of Baby Boomers are looking to remain active, butoften with reduced hours or in a different capacity thanfull-time employee.Last, but not least, technological advancements and

increased globalization are making the world of worksmaller. More and more companies rely on remote workersto complement their on-site teams, while, at the same time,workers are more inclined to relocate nationally and eveninternationally for the right job.As a result of these changes, many companies now have

a mix of the following labor categories at their disposal:� Full-time employees—top talent to fill pivotal positions;� Temporary staff—contingent labor to fill noncrucial rolesduring peak demand times, such as those surroundingmergers and acquisitions, tax reporting, injections of newcapital, or seasonal business surges;

� Independent contractors/freelancers/e-lancers— outside contractors hired specifically for their specialtywhen in-house staff can’t provide the expertise;

� Service providers (Statement of Work)—companies towhom specific tasks or processes are outsourced in orderto reduce overhead and risk and to promote agility; and

� Alumni, retirees, and interns—workers with knowledgeof the company who can function as ambassadors andeven be sourced as potential workers when necessary.

What’s crucial here, however, is that the majority ofcompanies don’t have insight as to how and why the differ-ent labor categories are deployed within their organization.That’s when establishing TSCM can make all the differencein succeeding in a competitive business environment.

Skills ShortagesRecent recruitment trends point to the emergence of a newnormal. There’s an increase in skills shortages, and talent isspread farther and farther around the globe. As a result, thelabor landscape is more competitive, so companies neednew strategies for locating, attracting, and retaining workers.Predictions from the U.S. Bureau of Labor Statistics show

The youngest generation ofworkers doesn’tjust want a goodwork-life balance;they want work-life integration.


that most finance and accounting occupations are set togrow by an average of 12.5% by 2022. In Europe and otherregions, this trend is likely to be similar. Yet despite thispredicted growth, companies already are struggling to fillopen positions—a situation that could very well becomedire in the upcoming years. There are a number of reasonsfor this trend:

An aging workforce. Over roughly the next 15 years inthe United States alone, 10,000 workers a day will turn age65, leaving a distinct gap at the senior level of many com-panies. Since this development also means these workerswill take a significant portion of intellectual property withthem, it’s only logical that employers are looking for waysto keep this knowledge in-house, either by finding ways toretain older employees or by establishing work arrange-ments that facilitate the transfer of knowledge within thecompany.

Inadequate entry-level skills. Despite a growing num-ber of finance and accounting graduates, entry-level posi-tions are proving difficult to fill. According to research byAPQC (American Productivity & Quality Center) and IMA®

(Institute of Management Accountants) that was publishedin the report “The Skills Gap in Entry-Level ManagementAccounting and Finance” as part of the Competency Crisisinitiative (http://competencycrisis.org/apqc-research),

hiring managers in general expect a higher level of aptitudeand experience from entry-level candidates than thisyoungest generation of workers possesses.

Higher standards. After recovering from the recession,hiring managers also expect more from experienced talent,searching for candidates who can demonstrate consistentadvancement and accomplishments as well as adaptabilityto new industry regulations. As a result, the pool of talentwith more advanced qualifications becomes smaller. Forexample, the new Proposed Accounting Standards Update2015-240, “Revenue from Contracts with Customers,” anupdate of Financial Accounting Standards Board (FASB)Accounting Standards Codification® Topic 606, could impactthe need for talent who understand how to implementthese new revenue recognition guidelines.

Lack of industry-specific experience. In manyinstances, companies are looking for talent with industry-specific experience, such as in the energy and bankingfields. Nevertheless, many employees with this kind ofexperience left those industries during the recession andmay not be interested in returning.

Establishing TSCMIt’s important to understand that there’s no one-size-fits-allsolution when it comes to talent supply chain management.Every company is unique and has unique needs that canvary over time along with changing objectives and externalcircumstances.Also, every organization has one or more talent supply

chain—methods by which the various departments sourcetheir talent—with human resources, procurement, andoperations often acting independently of each other. Forexample, one department might work primarily with arecruitment agency, while another might have its own net-work of independent contractors. In general, these methodsusually are based on historical processes that have provento be effective but are implemented with little or nothought to the company’s overall business goals. Yet aware-ness of these objectives should tie together every businessprocess a company undertakes.TSCM gets operations, human resources, and procure-

ment together to evaluate all the existing talent supplychains in a company. This includes gaining an overview ofhow the various labor categories are sourced and why. Italso involves gaining insight into the effectiveness of exist-ing talent strategies and how they support or impact overallbusiness objectives. For example, a department might useindependent contractors to meet its objective of quality andspeed, but if the company’s primary business objective iscost savings, then this particular part of the strategy mayneed rethinking.Examining existing talent pipelines and assessing how

they fit into the big picture can indicate which onesshould be kept and where new ones need to be establishedthat better align with business goals. It’s important tounderstand the role of talent suppliers at this pointbecause they can offer more targeted and effective supportwhen they’re aware of a company’s primary driversregarding talent.

71% of workerswould be ready to

move for the right job.

Source: 2014 Kelly Global Workforce Index

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Risk MitigationOne important aspect of TSCM that shouldn’t be overlookedis risk mitigation. Many companies rely heavily on contin-gent labor but have no insight as to who these workers areor how they perform. Especially when it comes to financeand accounting talent, the deployment of contingent andthird-party workers carries significant risk if they fail todeliver the quality of work expected. While full-timeemployees can easily be held accountable by their directsupervisors, establishing accountability is much harderwhen it comes to contingent talent, especially workerswithout a direct report in the company.There’s also the complication of safeguarding a compa-

ny’s intellectual property that contingent workers maylearn about or contribute to during the course of theirengagement. Although some companies are adding provi-sions for managing and safeguarding intellectual propertyto their contracts, this is still an area that requires signifi-cant attention.By gaining insight into talent pipelines and deployment,

companies are better equipped to evaluate where riskoccurs and establish processes to ensure quality and protectintellectual property. This involves clearly defining account-ability for each role filled as well as delineating the lines ofreport. In addition, companies should create strategies andmeasures that govern instances when compliance or confi-dentiality is breached or quality is compromised so theycan remedy the situation quickly.

52% of finance workerswould give up higher pay for a greater

work-life balance.Source: 2014 Kelly Global Workforce Index

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90% OF ORGANIZATIONS ARE HAVING A HARD TIME HIRING THE RIGHT ENTRY-LEVEL MANAGEMENT ACCOUNTING AND FINANCE TALENT.

Source: APQC and IMA, “The Skills Gap in Entry-Level Management Accounting and Finance”

Consequences to Employers Include:

� Increased time to fill positions

� Increased recruiting costs

� Hiring of less-qualified professionals

� Diminished quality of work output

How Can It Be Fixed?

� Emphasize mentoring programs

� Develop career path for employees

� Build employee/educator relationships

� Offer internships and on-the-job training


The Role of Workforce AnalyticsGaining insight into how talent is sourced and deployed—and subsequently creating strategies that better supportbusiness objectives—is the all-important first step in TSCM.But the true potential of this method doesn’t stop here.When implemented properly, it offers predictive capacitiesthat can greatly add to a company’s competitive edge. Andthe key to unlocking this potential lies with workforce analytics.Tom Tisdale, vice president of Talent Supply Chain

Analytics at KellyOCG Centers of Excellence, identifies in“Does Your Talent Supply Chain Measure Up?” (see http://bit.ly/1KY7ERz) that companies are prone to making fourmistakes when managing their talent supply chains:1. Using their own historical data instead of global bestpractices as benchmarks.

2. Ignoring the how and why of workforce planning.3. Using gut feel instead of objective data.4. Focusing more on managing individual talent suppliersinstead of managing the entire talent supply chain.

Workforce analytics makes it possible for companies togain insight into the overall dynamics of internal and exter-nal factors that govern the talent supply chain. When measuring objective internal data against industry data,companies can gain an understanding of where they canimprove their talent strategies by looking at how their tal-ent pipelines function, including how well their recruitersand contracted workers are performing in comparison tothe rest of the industry.At the same time, asking the how and why questions and,

instead of relying on gut feel, using actionable data to findanswers offer in-depth insights into the causes of and pos-sible solutions to talent gaps and blockages. For instance, ifa company is planning an expansion that calls for financialtalent with advanced analysis skills but doesn’t have any-body with these skills in-house, it can evaluate what thebest course of action is to attract the right professional. Thiscould involve recruiting in a different geographical area oreven retraining an existing employee to acquire the special-ized knowledge.As an integral part of TSCM, workforce analytics can

truly transform how companies create and adapt their tal-ent strategies. By providing insight as to how supply chainsare functioning, how suppliers and the talent they deliverare performing, and how and why obstacles occur, itbecomes easier to establish a holistic TSCM strategy that’sagile enough to meet current talent needs while predictingand preparing for future demands.

Maintaining Talent PipelinesWith an overview of a company’s needs and the best mix oftalent to deploy in order to meet business objectives, organ-izations need to turn their attention to how best to locate,engage, and retain these workers.In many cases, companies will look first and foremost

for local talent to fill open positions. Especially in industries

with distinct geographical hubs (such as Silicon Valley forsoftware engineers or New York City for talent in moneymanagement) or situations where there’s the possibility ofpartnering with local educational institutions to establishcurricula that cater to the industry’s needs, sourcing localtalent can prove to be a fruitful and long-lasting endeavor.For example, local businesses can work with regional col-leges to establish specific accounting and business manage-ment courses, contributing expertise and even offeringwork-study arrangements in the hopes graduates will seekemployment with local firms.Not surprisingly, however, when it comes to top talent

who demonstrate exceptional skills and experience, the tal-ent pool becomes smaller and more geographically dis-persed. This makes it more difficult to locate goodcandidates, but technology can play an invaluable role here.A professional social networking site like LinkedIn makes itpossible for employers to seek both active and passive can-didates and approach them directly about opportunities.Likewise, online talent communities like Inside Zappos andLinkedIn professional interest groups can play an importantpart since they allow candidates and employers to interactin a less-pressure-filled setting than a job applicationprocess. By using technology to their advantage, employerscan establish and maintain relationships with different cat-egories of workers across a wide area, making it easier toapproach them about work when the need arises.Engaging employees is the next step, and here it’s key to

know what workers want. Competitive salaries and benefitspackages, a good work-life balance, and clear opportunitiesfor career growth are essential to attracting full-time finance

Employers need tobe aware of workerpreferences andadapt workarrangements toaccommodatethem.


and accounting employees. They also want work environ-ments that are flexible, collaborative, and innovative.For example, an organization that has a core team of

full-time employees but needs somebody with in-depthknowledge of industry-specific accounting might only beable to find that expertise with a retiree who doesn’t wantto work full-time. So the company hires him as a consult-ant, enabling him to work fewer hours with a flexibleschedule while still contributing his considerable knowl-edge to the company.What all of this means is that employers need to be

continuously aware of worker preferences and, where nec-essary and possible, adapt work arrangements to accom-modate them. Interestingly, this can contribute significantlyto a company’s bottom line because it maximizes workersatisfaction, promotes retention, and keeps the core team offull-time workers to a minimum, allowing the organizationto remain agile and adaptable.

The Competitive Advantagesof TSCMAs we’ve demonstrated, TSCM offers your organization anumber of competitive advantages when implementedproperly. Among them are:

Improved workforce planning. Companies are betterequipped to make sound workforce planning decisionswhen they assess all available talent pools and labor cate-gories and understand how deploying talent affects overallbusiness goals. This is particularly advantageous in high-demand, low-supply fields such as math and technologywhere organizations can source from all the labor cate-gories at their disposal and create work arrangements thatmeet the requirements of this skilled talent.

Oversight. Workforce data is the foundation of well-informed, objective workforce planning. Benchmarkinginternal workforce data against external, industry-standarddata enables companies to gain an accurate overview ofwhere and how their workers are deployed. This enablesthem to adapt their workforce strategies to better align withindustry best practices.

Predicting talent needs. By combining workforce ana-lytics with workforce planning, companies are capable ofpinpointing skills and talent gaps as well as predictingfuture needs. This enables them to plan proactively andcreate strategies to make better use of all available laborcategories.

Risk mitigation. Experts estimate that up to half of anorganization’s workforce is contingent. But in many cases,employers lack an overview of who these contingent work-ers are or what roles they fill. This means that many compa-nies aren’t effectively tracking the talent working on theirbehalf, which creates significant risk. Companies need over-sight of all their talent and need to know how these peopleare performing and where a possible lack of complianceand/or performance could compromise operations. Theyshould also know how to react in these adverse situations.

Access to a wider range of talent. To a large extent,today’s talent—especially top talent—calls the tune. Estab-lishing work arrangements that are attractive to freelancers,

project workers, independent contractors, interns, retirees,and alumni, as well as expanding a company’s network ofsuppliers to encompass a wider geography, helps creategreater and enhanced talent pipelines.Implementing talent supply chain management is an

ongoing company-wide process that needs to be performedwith careful attention to detail and full awareness of com-pany and talent priorities. And with the oversight thatcomes from a holistic approach to talent management,companies can create more resilient talent strategies thatsupport their business objectives while allowing for flexibil-ity and adaptability when and where necessary. SF

Doug Arms is vice president of Americas Finance Center of Excellenceat Kelly Services, Inc., a leading provider of finance and accounting staffingand workforce solutions. He’s responsible for strategic planning, brandmanagement, thought leadership, and growth strategies aimed specificallyat the finance and accounting specialty in North America for both candi-dates and hiring managers. He is also an IMA Member-at-Large. You canreach Doug at (248) 229-7285 or [email protected].

Tony Bercik is product director for Americas Finance Center of Excel-lence at Kelly Services, Inc. In this role, he’s responsible for the strategicdevelopment and growth of finance and accounting workforce solutions inthe U.S., Puerto Rico, Canada, Mexico, and Brazil. You can reach Tony at(248) 463-8361 or [email protected].

Finance and accountingjobs in the U.S. are set to grow an average of12.5% by 2022.

Source: U.S. Bureau of Labor Statistics

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