What are the most important financial skills you should look for while hiring?
Your frontline force finance department, needs to be optimized to protect and prepare your business from facing the heat of the business environment and economic fluctuations.
A company's finance department plays a vital role in handling all the business's financial affairs, including monitoring the assets and liabilities, maintaining adequate cash flow, backing investments with sufficient grounds, improving pivotal business decisions, and creating an excellent financial image in the eyes of investors.
Being one of the critical drivers of a business's growth and prosperity, the finance professionals looking after these activities need a correct balance of hard and soft skills.
What does finance department do?
Apart from the activities mentioned earlier, specific functions are critical to a company's finance team.
Core actions of a company's finance unit:
• Budget preparation and allocation to departments.
• Forecasting and creating actionable plans for all the divisions.
• Preparing financial statements and reports for the final auditing.
• Assisting and coordinating with the accounting department.
• Handling all tax-related processes like tax calculation and filing.
• Keeping a favorable cash balance in the company.
• Looking for investors and long-term sources of finance.
• Acting as financial advisors to the company's top-level management.
• Participation in all central finance and strategic business decisions.
Importance of hiring the right people for your finance department
Hiring the right set of finance professionals prevents unnecessary losses for a company, fosters business development and stability, reduces the chances of financial misconduct, and promotes a healthy financial culture.
The HR team is bound to get overwhelmed by scrutinizing hundreds of applications during the hiring process, and the chances of selecting the unfit applicant rise.
But choosing an incompetent applicant negatively impacts your departmental activities and disturbs your organizational workflow.
Highlighted below are a few pointers that exhibit why choosing a suitable person with the correct finance skillset is essential in keeping the monetary workflows in order.
Hiring function is exhaustive
The hiring process is cost-attracting and time-consuming.
Estimating personnel requirements, list of open positions, drafting hiring copies, reviewing and scrutinizing the applications, conducting aptitude and interview rounds, background checks, and more.
The HR team needs to be vigilant about the applicant's previous experiences and behaviors by conducting thorough background checks.
If the applicant turns out to be a misfit for the position in the later stages, the HR department needs to go through the entire recruitment process once again.
And the repetition of the same process is utterly cost-heavy and taxing for the whole staff.
Direct impact on the company's finances
Finance professionals are hired to improve the company's financial well-being by acting as an advisor in challenging situations.
If the employee is incompetent in understanding the company's financial workflows and processes, they might fail to give out the correct financial advice in time of need.
And with the wrong direction being followed, the whole system can collapse.
Safety of confidential information
Your company's financial reports, bank statements, cash balances, gross investments, and internal matters are not to be disclosed to every employee in the organization.
The finance department should know the company's confidential data and be responsible enough not to unveil it to other departments.
If your employees in the finance department happen to be dishonest with sensitive information, it can cause massive chaos in the organization leading to declining goodwill and brand value.
Set up well-balanced hiring process to your company’s needs
The hiring process for each company varies according to its personnel requirements and job expectations.
A standardized and homogenous recruitment process helps identify the right choice for the positions without any bias and confusion.
Creating a well-drafted job post helps the applicants know the job requirements and increases the company’s chance of finding an ideal candidate.
It's not always the case that applicants apply according to the skills needed in the finance industry.
They might not have the required finance skillset, yet the applicants continue the hit and trial method.
In such situations, the manual screening of applications becomes a back-breaking task.
Sometimes, the possibility of the right candidate getting rejected or left out also occurs.
To eliminate the complexities of the manual hiring and recruitment process, companies need to opt for an HR automation software that helps screening out unqualified resumes, enabling onboarding sessions, payroll automation, creating benefits programs, altogether scaling up the HR process.
What makes good finance professional and how do you spot them?
The finance department functions are diverse and filled with crucial responsibilities; hence, the finance skillset required in the employee needs to be equally dynamic.
A complete finance professional needs to have the right combination of technical and generic skills.
An imbalanced ratio of these two skills can result in poor team coordination or loss of efficiency in the processes.
To avoid a lack of unity and uniformity, companies need to be conscious that the new employees have an adaptable nature and can work in teams without distorting the professional barrier.
Though every company will have its requirements and criteria for selecting finance employees, certain qualities of finance professionals remain common to all businesses.
What soft skills are needed from employees?
1. Industry knowledge
The ability to grasp and understand industry trends reflects the employee's resourcefulness and critical thinking.
Without deep sectoral knowledge, the employee might fail to provide the required assistance in times of need.
The knowledge should not be limited to past data and facts; the employee should keep exploring new industry dimensions to gain different insights into how modern finance functions work.
While hiring freshers, a common issue is their narrowed finance industry information, which might tempt the management to reject the candidate.
However, if the candidate shows enthusiasm to learn and open up to new things, the management should consider the applicant.
2. Analytical skills
Analytical skills needed in the finance industry are mainly concerned with understanding the financial data patterns, identifying unusual events, and the ability to counterfeit them immediately.
The finance department employees should be good with numbers.
The data analytics with these numbers will yield conclusions about the business's operating efficiency.
If the employee finds it unable to analyze these numerics correctly, the company might face challenges in the decision-making process.
3. Communication
Problem-solving skills alone cannot guarantee a smooth flow of functions.
If the finance professional fails to deliver the solution with a precise and straightforward description, its implementation might be problematic.
If other employees continue to work on the misinterpreted information, the entire workflow needs to be restarted to reverse the previous actions, leading to unnecessary spending and waste of time.
4. Independent research skills
During unexpected, complex, and intricate situations where the answers do not lie in the systems or database, the finance team needs to conduct independent research to arrive at a solution.
For this reason, they must know in which direction they should head to find the answers.
Independent research skills are highly emphasized for the accounting and finance department, as their work involves playing with numbers, and any mismatch in the figures is immediately displayed.
What technical skills are needed to work efficiently?
1. General functions of finance
All finance department employees should have a fundamental knowledge of accounting and bookkeeping principles.
These principles are the guidelines and rules for accounting activities across all companies, helping standardize recording and analyzing entries.
Common finance-based qualities include:
• Understanding of Generally Accepted Accounting Principles (GAAP).
• Financial statement preparation.
• Budget allocation.
• Handy with accounting tools and softwares.
2. Data management and query abilities
The data generated from finance activities grows exponentially as the business operations get diverse.
The storage and easy access of a large volume of data sets is the responsibility of the finance department.
With tons of information in the database, extracting a piece of data required immediately becomes difficult.
Hence, enabling database management systems can help solve this problem considerably.
3. Tech knowledge
Technology-based softwares are increasingly being used to conduct financial activities. Companies have shifted from the manual method of accounting to automated one.
The results can be seen in faster processing, reduced errors and duplicacy, enhanced visibility, better and quick workflows, and overall financial improvement.
Employees handy in operating digital softwares are an asset for the company compared to those who are hesitant to adopt.