Over the past year we have seen a consistently high demand for the treasury skill set and treasurers have been at the very centre of navigating the pandemic across all sectors. Of those organisations that have performed better as a result of COVID-19 and those that have been negatively impacted, each comes with its own demands and challenges for the treasury team.
The global financial crisis in 2008 had a game-changing effect on the profile of the treasurer and while we can draw some comparisons, we haven’t seen as much of a meteoric profile raise… yet. This is due, in part, to the treasury department still being valued highly following the essential role these teams played in many businesses navigating – and indeed surviving – the most challenging economic period of our generation. However, I also suspect we are yet to feel the full economic impact of the pandemic and that, as it plays out over the next few years, there will be some sectors and organisations that feel this more keenly than others.
As a result of this anticipated need for a strategic treasury skill set, CFOs are prioritising this over a more transactional approach. Many treasury departments have been able to successfully automate a range of processes, and the new remote-working dynamic that was forced on businesses has expedited the need for better systems and automation where possible. As senior finance leaders look ahead towards the next few years, their priorities are likely to be liquidity, interest rate risk management, cash visibility and funding.
Liquidity and cash visibility will be high on the agenda if the economy becomes more challenging and if costs increase as a result of the various global supply chain and energy issues. Interest rates are on everyone’s minds as increases look likely with the result that more leveraged businesses could find themselves needing to restructure or refinance at a less-than-favourable time.
Data is front and centre in the management of these scenarios and we are seeing a consistently high demand for an analytical, modelling skill set. This has been a growing trend for several years due to the automation of the more transactional aspects of treasury, and the appetite for the treasury department to be strategic, forward-thinking and proactive is only set to intensify.
During the pandemic – as with the 2008 crisis – many more strategic treasurers were required to dust off their transactional skill set to drop into crisis management. Drawing down on facilities and managing liquidity was the priority in the early days of lockdown, but this settled down quickly and most teams were well equipped for the challenge. Indeed, higher on the CFO’s agenda was a forward-facing approach on how to navigate the coming months, in addition to scenario-based analysis to help with decision-making.
So, what does this mean for recruitment? These drivers have certainly affected strategies: the heightened importance of the treasurer means that many CFOs are more likely to turn to specialist search firms to run a thorough and extensive search to ensure they are able to identify someone with both the technical and transactional competence to do the role, but also the strategic mindset and ability to build strong relationships with both internal and external stakeholders.
Conversations with my clients over the past 18 months have revealed similar themes, with the role played by treasury having been thrown into sharp focus and the skill set highly valued and much sought after. Many businesses that may not have needed a treasurer before are now looking to bring one in for the first time, and existing teams are upskilling and increasing headcount in order to cope with the increased workload. And that trend is only heading one way: treasury teams will be expected to do more (often without more resources) for the foreseeable future.
However, there is reason for optimism: the past few years have brought many new opportunities for treasury professionals, with the combination of advances in technology along with the challenges of a global pandemic shaping the role and completing the transformation from transactional to truly strategic. In my opinion, it’s unlikely we will ever go back to the old ways, and that the strategic treasurer is here to stay with plenty of value to add.
It is my expectation that the treasurer will become more strategic, spending extra time working closely with corporate finance and other stakeholders to proactively facilitate and drive business growth and performance. A career in treasury will increasingly offer the opportunity to really impact an organisation’s direction of travel. Make no mistake: if CFOs looking to recruit treasury professionals didn’t understand the importance of the role before, they do now.
Rachael Crocker is executive director for treasury at recruitment firm Brewer Morris
