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Podcast: How will the role of CFO evolve in the future?

By Paul Venables, Group Finance Director, Hays

The pandemic has forced change across the world of work and, now that global businesses have had time to adapt, leaders have the opportunity to look ahead and drive innovation as they navigate the new normal.

Today I’ll be chatting with Hays CFO, Paul Venables. Paul will be discussing how the pandemic has impacted upon the role of CFO and outlook as a finance leader and giving us his advice for CFOs in the future.

1. Could you introduce yourself to our listeners and explain a little bit about your role at Hays?

(1:00) I’ll be happy to. I’m Paul Venables, CFO of Hays PLC. Hays is the world’s largest and most diversified white collar recruitment business with 11,500 colleagues operating in 33 countries around the world. Every year, we help around 300,000 people find their next job. We’re a FTSE 250 listed company. And our annual turnover is about £6 billion. I’m one of the two Executive Directors who run the global business. And while I have functional responsibility for financing investor relations, an important part of my role is supporting Alistair Cox, our group CEO, both determining the strategy for Hays and driving the operational performance of the group through our regional management teams. Part of that, I review and approve all significant commercial contracts with our customers on a global basis.

2. Could you talk us through a very brief history of your career today? It’d be great to understand how you got to where you are today.

(2:01) Paul: Yes, I started with Deloitte in 1983 a long time ago, and spent eight years with them; four in the UK in Nottingham, and four in the U.S. based in Boston. Both UK and US qualified, had a very career with the like of extensive audit, M&A, and consultancy work across a variety of industries. When I left the firm, I was a senior manager in the US practise. In 1992, I then joined a logistics company called Ocean Group, which over time through acquisitions became Exel plc, then one of the world’s largest full service logistics businesses providing contract logistics, air freight, sea freight, and road transport in over 140 countries around the world.

I was at Exel for 14 years and did 14 roles, both in finance and operations. I started at Group Centre as a group financial analyst working on M&A capital projects and group reporting before moving into one of the businesses joining McGregor Cory, the UK and European contract logistics business as a Commercial Finance Manager. And then after two years, I became FD. In this role, I learned many of the key aspects of being a Finance Director, including financial processes, billing, payroll, credit control, and managing finance team of 100 people in six countries, as well as being an active member of the management team.

I then moved to be FD of the largest group division, MSCS, a global air freight and sea freight business based in 140 countries around the world. And here, I focused on building a strong finance team to drive the transformation of the finance function, setting up regional shared service centres around the world to drive efficiencies and best practices. Then, relatively uniquely as a finance professional, I then moved into operations. Initially, as a CEO of our technology and life science logistics division based in the UK and Benelux. I then project managed all aspects of the building of the first modern contract logistics facility in Penang in Malaysia. And later, I ran a global air freight and sea freight operations, including procurements.

Finally, I moved back into the group as Deputy Group Finance Director in charge of the global finance function, commercial projects, and M&A. And so we sold the business to DHL for 3.7 million in 2005. And in 2006, I joined Hays Group as Finance Director, and I’ve been actively involved in all aspects of the global transformation of our business over the last 15 years.

3. I’d really be interested in your opinion. We sat here today almost two years into the COVID-19 crisis. From your perspective, how was Hays as a business been impacted by the pandemic?

(4:49) That’s really hard to remember pre-pandemic, isn’t it? I think like many businesses, the impacts on pandemic on Hays has been dramatic, and on three levels. Firstly, on trading. Things fell by 37% within six weeks after the pandemic hit in March 2020. The fastest decline in activity by far in our 53-year history. It then stabilised on May 2020. And since November 2020, we’ve seen the strongest recovery and activity in our history, and the hottest permanent recruit market, both globally, including the UK, in the last 20 years. Exactly in operations, including finance, we instantly moved within a week at the end of March 2020. From being a business, I was in the office most of the time. I did most of its business face-to-face to be one that can fully function working from home all of the time. Then increasingly over the last year, finding a middle ground of hybrid working as the business starts to return to some form of predictable rhythm.

At the same time, we’re very proud in the 12 months after the pandemic started. We helped almost 250,000 people find their next job. An 80% of them were interviewed, agreed on terms, resigned from their existing job, and started a new job all remotely. A significant change in the market and our business model. And in the finance function, we’re very proud that during the pandemic, we paid 65,000 contractors intense every week accurately and on time, and we collected £120 million of cash every week. And then finally, and most importantly, we found a way to try and look after our employees, work with them, and train them and support them through the most difficult times.

4. As you mentioned, you’ve held multiple leadership positions in different organisations. How does this compare to other crises you’ve experienced over the course of your career so far?

(6:52) I think the main difference in leading a business pre-pandemic versus the 2008 financial crash when I was also at Hays is on three levels. First, I think on a personal level, it was a global health crisis with people being ill and dying around the world, and all of us concerned about our own families and our colleagues. Take into the sheer speed of the collapse in business activity, in part driven by the unprecedented state lockdown of many aspects of business and society. And the uncertainty about how long it would last and how bad it would mean. Maybe, it was in many respects a quite scary time. And thirdly, the instant remove to working remotely, whether that would work effectively and efficiently with any clients have demand for our services. Without doubt, it was also the one of the most exhilarating times in my career, one of the unique times where you can get to use all the skills you developed over 40 years in business all at the same time and at an extreme pace.

5. Pre-COVID, what did a normal day look like in your role as Group Finance Director for a global business?

(8:01) Fortunately, I’m not sure if I had a normal day back then. But most days, like a lot of people, I catch up with a couple of my key team members and have discussions with Alistair, the CEO, and other senior members of the business. I attend business reviews with the regions and many countries and deal with any important commercial issues that arise.

How has that normal changed as a result of the crisis?

I think the main difference is where I do the work. Pre-pandemic, I traveled 12 weeks a year overseas doing face-to-face review meetings with our major businesses around the world, travelling frequently to Germany, France, Australia, US, China, Brazil. And in the other meetings and reviews, were mainly by conference calls. Whilst now, like all of us and perhaps like IT professionals have always been, most of my meetings other than the meetings with my direct reports are via Teams. And I definitely missed the personal contact with the teams around the world. But interestingly as we move, we hope into a more unrestricted world over the next year. I don’t expect to be abroad six weeks of the year going forward. And so I think we’ve all learned ways to work efficiently using different methodologies.

6. A 50% reduction in travel is significant. What lessons have you personally learned as a finance leader since the start of the pandemic?

(9:34) In many respects, it just reiterated the importance of your team. I think the pandemic has just stated the importance of surrounding yourself with a great team of people in all the key roles. Which for me include the group punch controller, regional and country FDs, and the heads of tax, treasury, internal audit, and investor relations. You can’t do it all yourself. The more complex and the greater the size of the business you are as a CFO, the better the team you need around you. A business is a team activity. And I think the difference for us as Hays’ senior team if I compare 2020 versus 2008, is that we went into the pandemic with a top-quality team around the world. We were really happy with the team we had. Whereas in 2008, I only joined in 2006, Alistair joined in 2007. There were still a few members of the team that we weren’t sure we’re going to make it. I have to tell you it is one of the greatest things in this pandemic is being surrounded by that calibre of management team. It actually made us making hard decisions quickly much easier.

7. What impacts, positive and negative, do you think working remotely or in a hybrid way has had on finance teams and CFOs?

(10:50) I think on the positive side of it, one of the things that struck me specifically early on was just the teamwork and the extra effort by the global finance team, especially during the start of the crisis. In the first three to six months, the performance was excellent. And the team performance exceeded our expectations. Everybody really went the extra mile. They knew that this was an unprecedented situation. And I think they did a superb job. For example, it’s a time when you might have thought it was difficult to get cash out of our customers. We achieved consistently record, low DSOs (Day Sales Outstanding) over the last 18 months.

On the negatives, and it’s kind of a negative with a positive at the end, perhaps. After that initial period and the energy that everybody had working remotely in crisis management, the feedback we got from our teams is that increasingly felt self-isolated. Working fully from home and finding it impossible or very difficult to switch off when am I working and when am I on my personal life. And that’s actually the move to scheduled hybrid workings, where you’re in the office with the teams two to three days a week but also working from home. It is face-to-face teamwork on one side had transfer best practice and offers the benefits of home working and better home life balance. So perhaps this negative actually is becoming a positive as we look at the next three to five years.

8. The world of work has changed enormously. Do you think it’s become increasingly important for you and for your teams to continue to learn and upskill?

(12:36) I think continuous learning and upskilling is a vital way of keeping yourself current and relevant. And actually, therefore, if you don’t do that, at some point in time, you’re going to be behind the pace. Whether it’s technology, accounting standards, or changes in legislation. We try and encourage all of our teams to take half a day a month to stay current, and that includes me. So I try to take perhaps a Friday afternoon towards the end of the month when I’m pretty tired. And I’ll catch up on a video, on a new standard, or a new form of technology. I think that just keeps you fresh as well.

How do you make this a priority, particularly when teams are busy when the pace of work is so fast?

I think it’s carving out time. And then the other thing which is interesting at the moment was the day-to-day operations were really, really good during the pandemic. It works efficiently. What’s fascinating as well, reflecting on your earlier question, as we move into a process of improvement and innovation, how we need teams together, and we need a team that has got current skills. So I think it’s vital to make sure that you can do a great job.

Well, CFOs and their teams become even more of a fundamental in driving growth, change, and innovation to their organisations in the future.

I actually think a strong commercial CFO and finance team has always played an important role in helping drive growth, innovation, and change. Today, that role is enhanced, I think, because of the importance of data. The part of the secret source for any successful finance professional today and tomorrow is the ability to systemise and automate the collection of vital and accurate operational and financial data that can be sliced and diced, and then to interpret it and present it to key operators to enable them to make faster, smarter decision making. And quite frankly, you didn’t have the technology to do that 40 years ago. Whereas today, you’ve got a real ability, even a big complex business like Hays in 33 countries, to look at summaries at one level that enable an operator to drill right down the information that is valuable in them deciding how they run their businesses.

9. Do you think automation and technology will radically impact or change the finance function in the future?

(15:02) I think the use of smart technology is absolutely critical in driving efficiencies. The automation or elimination of manual tasks as part has continuously reducing the cost of transactional finance. So I think that’s been the case for a long time. But as the use of AI specifically develops, which is relatively new technology over the next five to 10 years, many of the non-value-added non-personal processes will be automated. But again, this has the real benefit as it has over the last 10 to 20 years. They are freeing up time for school finance professionals to focus their time on analysis and decision-making. But for finance professionals to do that, they’ve really got to stay current on technology.

10. As we mentioned at the start of the podcast, you have a wealth of experience. Over the course of your career, how has the role of CFO changed so far?

(15:54) This feels like ancient history, but over 38 years in finance and 25 years as an SD. The role has changed in many ways. I’d almost just identified perhaps four. Firstly, the business has become more global, with lower margins, the need for much faster decision making, the needs for businesses to become more efficient to survive, and the exponential growth in technology, data, and product choice. But there are some parts of a successful CFO that have been changed. The importance of having a real feel for trading trends in the business and numbers. And building a strong team of accurate and timely payroll and financials, and the ability to collect cash on a timely basis. These are as vital today as they were when I started.

The fundamental difference, this is now versus 20 to 30 years ago, is just the pace and change of technology. And that’s how finance teams perform their role has been revolutionised and continues to change on a rapid basis. This also helped automate so many financial processes and the production of financial data itself. Today, month ends are done in two to five days, whereas when I started, you were lucky to have it done in 20 to 25!

11. That’s just such a radical change of pace. Has COVID accelerated this change?

(17:21) Yes. I think what it’s done is it made both businesses have to go back to first principles and think again. COVID bought the ability more important than belief that many processes can be done efficiently or remotely. And that leads to the obvious question, as my Australian FD said about a year ago now. If a task can be performed efficiently from Bondi Beach, it can also be done for Manila. And therefore, for all finance functions, which aspects of the business should be done in-country, regionally, or globally in lower-cost shared service centres? And whilst that debate has been around for 25 years, it’s probably more in the headlights today.

My own view is that the greater degree of technical knowledge needed around a role and personal contact in a role, the more local those roles will always be. If you’re in credit control, if you’re in payroll, that knowledge is incredibly important in the country, and I think that’s likely to say, as well as decision support. But the less technical knowledge lately, the less personal contact, the more admin based, then the more global it can be done. I think most companies will re-evaluate the finance functions under this lens over the next five years.

12. Obviously, it’s not just your role or the role of your department, but the roles reporting into you and those functions that report into you. Have you seen those change as well over the years?

(18:43) For years, the roles are pretty much still the same. But the importance of technology and data has increased. And therefore you can’t be an effective finance professional without being a very strong technical abilities. And also, all finance teams. It’s a little bit like all marketing teams now is all about data marketing. For our finance teams, we’ve all got data analysts in the teams and that role will haven’t been invented 20 years ago.

13. Has the CFO role become, in your opinion, has it become more cross-functional or cross-departmental?

(19:18) Yes. I think because faster decision making has been modus operandi now for the last 5 to 10 years. Businesses have had to become more connected. The need for a CFO to work closely in tandem, whether operational, IT, HR, colleagues has increased in importance. And then finally, and I hate to end this section on the negative, but one of the other largest changes to finance teams over the last 25 years has been the sheer increase in admin burden and corporate governance imposed on business by governments around the world. And unfortunately, I don’t see that trend reversing.

14. As we look towards growth and recovery, what are the top three strategic priorities that you’re focused on right now as the CFO of, as you mentioned, a global business?

(20:07) First, in the business itself, I mean, Hays is the largest recruitment specialism, which represents more than a quarter of our business is in technology. And we’re a number two global player in that specialism. Our number one strategic priority is to double the size of our technology business over the next five years. And that would improve our pre-pandemic profits alone, just if we achieved that in technology by more than £100 million. I and my team are determined to play a leading role in making this happen.

Then secondly, as part of the finance function, we’ve established a global project to look at all aspects of our major financial processes globally. And make sure that they’re as efficiently as possible as I explained earlier in a post-pandemic world. And that’s certainly my second priority. And then finally, and this is kind of always one of the three. The focus is always on strength and depth to the finance team. And to ensure that we continue to provide a challenging, motivating, and rewarding career path globally to continue to develop our talent. These team members who continue to ensure that we can offer a great service to all of our stakeholders in the business. This is both a passion for me personally and also a stated strategy.

15. For those listeners who are hearing you talk who think that this might be a career path for them, who perhaps even aspire to become a CFO one day, what advice would you share with them to help them get there?

(21:38) I think, first of all, don’t look too far ahead and focus what skills I don’t have the same level of skills as a CFO in my business today. I think, first, try and ensure earlier in your career that you’re working for people you respect, and you can learn from, and as to get as much experience as possible. Working payroll or credit control lengthen processes. So you know how important the basics are. If there’s a shared service center abroad, go and do a stint in that shared service center. Work on projects even more if they’re on a global basis, and worked with projects where you’re working with colleagues from different departments. So you start to get a really good network and understanding for the business you’re in today.

Secondly, you will learn many of the most important lessons in your first finance director role. And ideally, try and make sure you’ve got supportive MD, and also somebody with a finance background who can mentor you. Perhaps somebody who you worked with five, ten, 15 years ago that you’d value their opinion. Throw yourself fully into the role. Don’t be afraid to make decisions. Focus on the people. And equally, don’t dwell too much when you make mistakes. And reiterating what I said earlier on, the third point, the bigger the role, the more important it is. Not just to surround yourself with great people, but also to remove any culture assassins in a business and poor performers who are not prepared to change. A strong team is the best guarantee that you’ll be successful.

And then finally, don’t just bring your scale energy and organisation to roll, bring humour. If you think about it, we spend 40 to 70 hours at work a week. And getting to know your team, showing that you’re human, and using humour is vital to ensure connection with the team, building a positive culture, and an improved performance.

I could not agree with you more on the importance of humour and a bond in the workplace. I think you’re absolutely right. We spend a large part of our weeks, and certainly our lives. And if that can be enjoyable, then you’ve got a committed team.

And even more now, because if we’re not careful over the last 18 months, some culture of the business can start to break. For example, we had an office get-together. It’s call a get-together last Thursday, pre the new restrictions coming in, et cetera. And just the energy you got from everybody in the room being together, able to talk to their friends and colleagues, that’s an important part. Celebrating success is an important part of building and maintaining a culture. And I think post-pandemic is absolutely vital as part of maintaining and creating a successful finance team.

16. You’ve already given a wealth of really good advice there, but would you have anything specifically for someone who’s perhaps starting out in the role of CFO, and how they can make a strong initial impact?

(24:41) Well, we’re not just going to give some help, Chloe. We will also give them a video they can watch. So increasingly, we’re recording a video series in January about what it takes to be a successful finance director. And the second video is all about how to make a successful impact as a new CFO in your first 90 days. So a 62nd snapshot in summary, are the financials accurate and timely? Do you have enough cash in facilities at the bank, evaluating the strength and depth of the finance team? Do the finance processes work efficiently? Investing time with the key operators in the business to get a clearer understanding of their strategic priorities, and also how they view the finance team.

Visit as many locations and departments in the business as possible. Walk the floor. Talk to the people at the coalface in an organisation and meet customers. And then, with that knowledge across the business, start to develop a clear, concise prioritised plan. Ideally, no longer than two sides of paper. But what you want to do, and take the CEO through the plan, you’ll need their support and investment. And then when the plan is agreed, decide on the key people roles, communicate the plan with the team, and then execute in the right priority order. And if this is of interest to you, and you’re starting a new role, I suggest you watch the five minute video which covers these points in greater detail when we issue in February.

17. I would like to end on a question that we asked all of our podcast guests. What do you think are the top three qualities that make a good leader? And crucially, do you think these qualities have changed as a result of the pandemic?

(26:41) First, I think good judgment. What do I mean by that? I mean, a sound and balanced business judgment. Secondly, in people. A good instinct for people and a strong belief in developing them and building a strong team. And third, creative drive. The ability to spot trends, drive the business forward to exploit them. And the good news is, these are important today post-pandemic as they were before, and that will be in 20 years’ time.

About this author

A Chartered Accountant and also USA qualified, Paul started his career at Deloitte & Touche where he was a Senior manager in its USA practice. This was followed by a 13 year career at Exel plc where he held a number of senior finance and operational roles including Deputy Group Finance Director and was a member of the executive board of Exel plc and Chairman of their Acquisitions and Project Review Board. Paul was appointed Group Finance Director of Hays plc in 2006 and has helped transform the business into the preeminent global specialist recruitment business with operations in 33 countries.

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