Chief financial officers have a fiduciary responsibility to increase diversity in their companies, and that includes age as well as race and sex, according to speakers at the annual CFO Forum in Boise on June 20.
Increasing the diversity of the board of directors by as little as 5 percent leads to more and better innovation and improved financial performance, said Stacy Parson, principal with Knowetry Consulting and partner with The Dignitas Agency. Given this information, CFOs could be considering negligent by not increasing diversity, she said. “If this were any other issue, would you be hesitating?” she said. Moreover, diversity is driven by culture, and culture is controlled by budget, controls and processes, and business strategy – all of which are controlled by the CFO, she added.
Companies also need to be looking at generations by age differently, both for workforce and for customers. The millennial generation is 83 million people and is larger than the Baby Boomer generation, which is starting to retire, said Matt Beaudreau, from the Center for Generational Kinetics. In ten years, they will be 70 percent of the workforce.
Millennials — which Beaudreau defined as people born starting in 1977, which would make them as old as 40 now — are technology-dependent. Companies are losing job applicants because they don’t have an Instagram account and don’t have a way for people to apply for jobs from their phones, he said. The generation that follows, Gen Z – born after 1995 – has a strong work ethic but has grown up with technology that lets them work and buy products from home. Consequently, for that generation, mobility and being able to work from home are major factors.
Beaudreau also recommended using pictures and videos to train employees, videos with testimonials from employees to humanize the company, and social media and LinkedIn to recruit employees rather than requiring resumes. Because technology trickles up, steps taken to attract Millennials and Gen Zers will still attract Baby Boomers and Gen Xers as well, he said.
Locations like Idaho that are seen as further away, and with lower pay, can still have an attractive corporate culture, Beaudreau said. Or people can live in Boise or Spokane for the lower housing costs and work virtually for a company in Portland or Seattle, said Steve Scranton, vice president and chief investment officer of Washington Trust Bank.
Companies should also be looking to attract millennials because employee productivity increases until 45 and then levels out until 55, said Kyle Healy, vice president of corporate development for NFP Retirement. In addition, almost 80 percent of healthcare costs occur after 40, he said.
CFO Forum membership includes 25 percent women, with just two Asian minorities. One is Bachchi Samahon-Oumar, president of the Treasure Valley CFO Forum, which put on the conference. The organization has no Hispanic or African-American members, and doesn’t track members by age, Samahon-Oumar said.
A Deloitte survey from earlier this year found 95 percent of respondents agreed their boards needed to seek more candidates with diverse skills and perspectives, and that 90 percent agreed that gender and racial diversity alone was insufficient. On the other hand, only 16 percent rated a lack of diversity among the top problems they faced recruiting new members or planning succession. And 87 percent of board members said they continue to source talent from a relatively small and similar pool of candidates — most of whom are current or retired CEOs — which is just 19 percent minority and 16 percent female.
As with many other Idaho industries, finding accounting talent is a problem given the tight labor market. One attendee, who asked not to be named, foresaw difficulty hiring a new accounting person because of the company’s location in a small city on the outskirts of the Treasure Valley, but said the CEO wouldn’t consider moving the company or letting people work remotely.