After a protracted period of uncertainty and instability in 2014, the year of 2015 has proved to be more optimistic, with slow but steady growth into 2016. It is expected that this positive momentum will continue into 2016, along with the industry’s shift into digitalisation. Such a shift has resulted in an evolution of roles for mid to senior hires in the financial industry. These are our top three picks on the trends of the finance industry to look out for in 2016.
1. Shift of Focus Towards More Strategy Driven Roles
Managing the checks and balances, keeping the budget and ensuring proper accounting practices are compiled with are no doubt still relevant and important skills in finance positions. However, as companies cross geographical boundaries and perform complex cross-border transactions, financial roles are no longer confined to their geographical boundaries. The once country-centric position of a typical Chief Financial Officer (CFO) has now evolved into a much more demanding role, requiring an international and strategic focus.
With greater awareness and threats of corporate scandals, companies have begun to turn their attention to risk and crisis management. CFOs are also required to possess knowledge on capital markets, mergers and information technologies, leading to an increased influence of their position within the organisation. The necessity to engage varied groups of stakeholders has also seen CFO’s performing cross-functional roles in investor relations, commercial activities and strategic M&A.
“Whilst the need to possess the fundamental skillsets such as cost control, accounting and budgeting is essential, strong candidates are often distinguished by their adaptability and flexibility in their job scopes. Those who are able to drive strategic initiatives and capitalise on opportunities are likely to emerge as the cream of the crop,” said Ben Horn, Partner specialising in the finance vertical at Space Executive.
2. Moving Away From the Big Boys to the More Streamlined Technology Firms
Increasingly, senior candidates are rejecting global banks and financial institutions, opting for opportunities in the leaner, “sexier” and innovative FinTech firms. As FinTech firms are not subject to the same regulatory pressures faced by major financial institutions, these firms are able to offer competitive services at a much lower cost due to the advent of technology. With the financial technology (FinTech) market estimated to reach $8 billion in global investments by 2018, this trend is likely to continue in the near future.
Graduates from the top business schools are also “seduced” by the prospect and culture at technology companies such as Google and LinkedIn. For instance, 32% of the class of 2013 opted for tech jobs whilst only 26% went into finance. This was the reverse situation just two years ago when 13% and 36% went into tech and finance roles respectively. It is also unlikely that graduates are lured into these roles due to remuneration as tech firms tend to pay less, with median base salaries at US$120,000 whilst finance jobs start at US$150,000.
3. The Pursuit of Advancement
Especially in developed markets, the saturation of talent in the local market or the lack of career progression for some senior candidates in their particular department within the organisation makes it hard for them to advance. Many candidates end up remaining stagnant with no real prospect of moving up in the near future. As such, senior talents have to seek alternative avenues for progression.
“Many senior candidates have turned to the emerging markets such as Myanmar or Thailand as such locations offer candidates a promotion in position. Roles ranging from General Manager to Chief Financial Officer provide candidates the chance to take on greater responsibility and allow for increased exposure. These candidates tend to undertake short to medium term appointments of two to three years. After these overseas stints, many of them get to move even further upwards,” said Ben.
Interestingly, most multinational companies do not state explicitly that overseas postings are necessary for career advancement. Despite that, 80% of employees continue to believe that an assignment in a “major emerging” market will be beneficial to their career progression.
If you would like to find out more about the latest financial trends, speak to Ben Horn, Partner - Finance, at Space Executive.
Economist Intelligence Unit (2010), Up or out: Next moves for the modern expatriate