How Digitization, GST and GDP have Redefined a CFO's Role
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In the HR industry, an enterprise’s supreme asset is its people. Growth and performance are driven by an organization’s employees, and success is essentially related to skills, talent, knowledge, and abilities inherent in the workforce. These values are worth more than any physical asset. As businesses around the world seek to grow, the two most likely hurdles they will face will be paucity of funds and a scarcity of human capital.
To deal with this, high-performing Chief Financial Officers (CFOs) have to play a more active role within the organization. They will have the responsibility of strategic personnel planning and continuous forecasting. They have to think beyond the stipulated perception of planning a workforce with respect to headcount budget.
CFOs are known to bring with them their expertise and analysis, and combine external and internal data in a way that helps the business strike the right equilibrium in building, obtaining and deploying talent to support the corporate strategy.
In an exclusive interview with Entrepreneur India, Marco Valsecchi, Chief Financial Officer, Adecco Group India, enunciated on topics like the role of CFOs, impact of digitization, GST and future roadmap for the HR industry.
Valsecchi, who has the overall responsibility of supporting the business and leads the finance function and operations teams at Adecco India, was of the opinion that productivity is the base value driver of any HR business around the world. Hence for him having a clear understanding of what drives productivity, how to engage employees and how to improve the management of personnel turnover are of utmost importance in the sector.
Digitization is Transforming a CFO’s Role into a Business Intelligence Unit
The recent digital transformation happening around the world is impacting the way companies do business and also the way governments operate.
The digitization of business processes is the current differentiating point among companies in every sector. The way companies engage with clients and customers has changed radically. With this, the CFO’s role is transforming to something more akin to a business intelligence unit, where constant mapping of environmental changes would be required to predict and realign strategy and reduce risks.
Agreeing with this Valsecchi said, “We need to incorporate instantaneous feedback into corporate processes to enhance the product or service experience. This makes the role of the CFO central. Being ideally in charge of processes in the company, the CFO needs to be able to partner and drive internal transformation in a structural and holistic way to ensure that digitization impacts the bottom line of a company positively.”
His roadmap to digitization requires the CFOs to focus on two areas. The first one is to make a company analytic ready. “The availability of an enormous amount of data makes it imperative to be able to store, fetch, analyze and suggest course of actions. This has to be done, as much as possible, in real time in order to ensure that clients and customers are delighted and ready to buy more,” he elaborated.
The second focus for him is to be able to create the infrastructure and hire the right people in order to compete.
How Big an Opportunity is GST Implementation in India?
Apart from digitization, the introduction and implementation of GST is expected to bring with it a significant change in doing business in India. Companies will invest in GST software to implement the best practices, gearing up for changes in processes, training teams and developing IT systems for being GST compliant. For this reason, experts believe that temporary jobs will gain a big boost in the GST regime across all sectors.
Valsecchi said the job market scenario seems to be gaining an expected momentum across all sectors after GST implementation. “The more long lasting effect it has, the more macroeconomic it is in nature. Less burdens at boarders, easier and simpler flow of goods will increase the potential GDP of the country and create more opportunities in several sectors,” he said.
The economy is slowing down, but the HR industry is still flourishing. The impact of GDP has given a minimal break to the industry mainly due to its lower penetration in the economy.
The prospects of the HR industry are not affected by movement in GDP, but how fast companies will understand the benefits of having a portion of their workforce flexible to sail through uncertain times.
According to Valsecchi, the growth of the flex work is in a secular positive trend in India and it will continue to drive jobs, efficiencies for companies and wellbeing for communities as a whole.
“If we look at the prospects of the permanent recruitment they still remain sound and positive. The opportunity is still massive in India given the massive untapped opportunities in such a big market,” he opines.
However, he cited automation and the pressure that technology is asserting to companies playing in the HR space as a bigger threat to the HR industry. “Digital transformation has made every sector in the economy update and transform the processes of doing business. The HR industry is a little behind, and must catch up quickly to be able to sustain the volume required by the demographic trend and the prospects outlined before,” warned Valsecchi, who comes with more than 20 years of experience in finance and investment and has worked with companies like Randstad, Morgan Stanley and Nextra Investment Management.