After the tumult of the pandemic years, many technology companies are now seeking stability through long-term profitable growth. An organisation’s workforce plays a significant role in whether it can achieve profitable growth, and hiring and retention have never mattered more.
HR is often considered the one-stop shop for all things people management, but a CFO can wield substantial influence in how a company treats—and hopefully retains—its workforce.
CFO-led efforts in job architecture and sales compensation play a major role in driving employee satisfaction, and ultimately, boosting talent retention.
Talent retention is about a sense of belonging
Employee satisfaction is directly tied to a long-term sense of belonging at an organisation. Mission-driven companies, like those often found in the technology industry, must ensure the value proposition to employees extends far beyond their earnings potential.
The organisations that successfully instil this sense of belonging in their teams will reap the benefits— a 56% increase in job performance, a 75% reduction in sick days, and a 50% drop in attrition risk, according to research firm Betterup.
A positive employee experience drives not only long-term talent retention, but also near-term productivity. Particularly in tech roles, where individual productivity can be difficult to assess objectively and quantitatively on a week-to-week basis, companies are dependent on employees going “the extra mile” without a direct link to pay or public accolades.
The employees willing to maximise their productivity are those who are most satisfied—Slack's State of Work 2023 survey found that 82% of respondents attributed their productivity to feeling happy and engaged at work.
As CFOs are keenly aware, in addition to being a bad look for any organization, employee attrition is extremely expensive. Hiring, onboarding, training, and ramp time are significant line items. Satisfied employees—who work 13% harder than their disgruntled counterparts—play a notable role in impacting the bottom line.
To keep employees satisfied while maintaining the course toward profitable growth, CFOs should give their employees the gift of clarity.
Belonging comes from clarity
Nothing contributes more to a sense of belonging and value within an organisation’s broader mission than having a clearly defined role. This clarity positions employees to fully grasp how they fit into the bigger picture and contribute to the collective sense of broad, overarching purpose.
CFOs can deliver this much-needed clarity by designing and maintaining clear job architecture. Are core competencies aligned across roles? Is the pathway to promotion clearly defined for any given employee?
By crystallising job expectations throughout the organisation, CFOs position employees to commit for the long-term. With clarity on the 1-, 2-, and 5-year path for their respective roles, employees gain visibility into their own career trajectory, which boosts their sense of belonging, increases job satisfaction, and drives retention.
Meanwhile, compensation programs position companies to ensure they are meeting their cost profile targets and fulfilling their pay philosophy objectives.
By analysing spend at the platform job level, CFOs can benchmark their pay levels and analyse their approach relative to the market. In turn, performance expectations can be fine-tuned to align with relative pay levels. For example, an account executive role paid at the 90th percentile can be reasonably expected to outperform the market average for per-rep productivity.
Compensation plans have a direct impact on employee trust, morale, and satisfaction. Employees gain assurance that they’re not only paid well relative to the market, but also paid equally for equal work internally.
Both job architecture and compensation programs can substantially improve job satisfaction, boost productivity, and lead to long-term employee retention. How can CFOs dedicate resources toward these initiatives while keeping an eye on costs?
Providing clarity is financially responsible
Designing and maintaining job architecture and compensation programs are not necessarily expensive exercises. Depending on the organisation’s starting point, they may even lead to overall savings.
CFOs should approach these initiatives as opportunities to stabilize their cost structure and dramatically increase long-term visibility. With aligned architectures and competitive pay, employees’ role definitions are sharpened, FTE needs are clarified, pay levels are stabilized within bands, and job levelling provides a multi-year view of headcount costs.
The effectiveness of job architecture—and the ensuing opportunity to assess pay levels—is difficult to measure day-to-day. The impact of these initiatives will be felt in the long term, seen in higher levels of employee satisfaction, boosts in employee productivity, and extended employee tenure.
CFOs must take ownership of talent retention
As many organisations—especially in the technology industry—steer themselves toward profitable growth, retention and employee experience must be top-of-mind. CFOs can make a tremendous difference in employee retention by spearheading efforts in job architecture and compensation programs.
Not only will CFOs gain a deeper understanding of their teams’ lived experiences, but they will ultimately unlock new levels of clarity and job satisfaction. The more CFOs can help workers understand their role and purpose within the organisation, the more they can improve retention and drive their organisation toward long-term success.
