How to maintain treasury proficiency and continuity amid the “Great Resignation”

Treasury and accounting teams face challenges on multiple fronts in the current environment, and one trend most all are confronting is team turnover and its threat to business continuity. Viewed as a cost center, finance teams are lean to begin with. The employee-centered job market — driven by wage inflation and shifting employee expectations — compounds the issue as employees chase work-from-home arrangements and upward mobility. Like any sea change, this creates both challenges and opportunities. While high turnover and ample open positions warrant an increased focus on employee retention and contingency planning, they also offer the chance to attract new talent, reinvent your team dynamic, and streamline operations. Whether you’re in survival mode hoping to weather key-person risk or embracing the new environment as an opportunity, consider the following as you navigate the Great Resignation and Great Reshuffle.

Expect changing work profiles

While some recent workforce changes may be transitory, others may last longer as teams adopt new work profiles. Whether it’s the types of activities your team is undertaking, changes required by remote work to accomplish them, or new team dynamics driven by work-from-home flexibility, new views of what a treasury team looks like at any given organization are emerging.

Conquer immediate challenges

If team attrition or a painful adaptation to hybrid work arrangements is creating disruption, prioritize addressing the immediate challenge. This could include plugging personnel gaps, altering processes to support hybrid work, or formalizing remote work adjustments into a sustainable, repeatable model. If your organization lost key talent and seeks to fill a position, you may be forced to rethink job requirements and responsibilities. Often, this includes at least some adjustment to the new job posting versus the vacated position. This may stem from a disconnect between your operational needs and remaining, overburdened team and resources. It may force you to rethink the ideal capabilities and requirements for the role, addressing questions, such as:

• Should this be a more junior or more senior role?
• Does this job require two people instead of one?
• Can elements of this role be automated or outsourced?

Considering these issues while filling your immediate need can initiate longer-term improvements.

Proactively embrace opportunities

Whether it is thrust upon you through employee turnover or undertaken as an intentional strategy, you can proactively embrace employee turnover and view it as a chance to attract new talent. This entails being more intentional about redesigning your treasury function and work styles to align with the new reality. Instead of waiting until you lose an employee, you can start a conversation about your ideal state and what it would take to develop a proficient, sustainable team. Perhaps this means designing roles to be more strategic, more fulfilling, or offering more development opportunities. You may be able to operate in a smarter, more efficient way that leverages a smaller headcount or gives your current team more capacity to take on interesting side projects and areas of personal interest. In many cases, the role redesign process can also provide meaningful retention benefits by offering career development opportunities.

Reimagine your treasury function

You can begin proactively embracing opportunities by taking these seven steps:

1. Document current processes

If your organization is like most companies, you don’t have fully documented processes in place. You may have reasonably accurate policies, but often the supporting detail at the “screenshots and operating procedures” level is outdated or non-existent. You may have some institutional knowledge supplementing existing documentation to capture the exceptions inherent in a complex treasury program, but in times of high turnover, that reliance on institutional knowledge can create meaningful key-person risk. Whatever your starting point, take a fresh look at your documentation to uncover areas where business continuity relies on processes or information that exists only in someone's head. Then, develop documentation that can facilitate the fluid transfer of roles and responsibilities within your team.

2. Benchmark against peers

Before embarking on a refreshed staffing model, review your program relative to your peers and leading industry practices. Consider leveraging an outside partner or industry peer group with visibility into the practices that organizations like yours are successfully employing.

3. Whiteboard your ideal state

Starting with a blank slate and whiteboarding your treasury organization adds value even if you don’t have the desire, budget, or buy-in for a complete overhaul. Taking the time to ask, “What would we ideally want to achieve?” can uncover the low-hanging fruit of small changes that may yield an outsized impact. You may find pockets of quick improvements, such as cross-training or process flow efficiencies, along with areas requiring more material measures, such as a system change. Mapping out your dream state is something you can undertake as a team to uncover and prioritize areas for improvement.

4. Leverage technology and automation

Redefining your treasury function often means employing technology to increase data visibility, add controls to the process, and use valuable human resources in higher value add activities. How much time does your team spend time chasing down data from different business units and coordinating internally to align on the right data snapshot for hedging?

A treasury technology platform can:

• Serve as a centralized repository where multiple users can input data, automatically monitoring your progress towards a full dataset
• Provide built-in audit trails, so you can automatically flag individuals or business units for updates — and your system chases down the data instead of you
• Enable you to set permission standards for users worldwide so everyone can access the data relevant to their roles but with appropriate controls in place to protect the aggregated data
• Enable your treasury team to review the organization’s exposure profile, approve suggested trades, and execute hedges, so you can focus more effort on strategy and less on data aggregation

Technology can increase efficiency and add controls, allowing you to utilize treasury resources more effectively and reduce human error. Importantly, consider your processes holistically. Rather than automating clunky, timeworn procedures based on current technology constraints, outline the optimal process and then consider how technology can best facilitate it.

5. Conduct cross-functional training

Documenting processes across functional roles and providing training so multiple people can complete each function provides continuity in case of key-person risk. Reacting to an employee’s two-week notice with a frantic bid to extract knowledge from one person's head and replicate it until you can backfill the position provides significant strain on the team, especially in today’s competitive hiring environment. Cross-training employees for different roles can alleviate that key-person risk while also creating development opportunities for people on your team — which can also improve job satisfaction and minimize turnover in the first place.

6. Consider temporary or permanent outsourcing:

In some cases, you may decide it makes more sense to outsource certain roles, rather than fill them internally. Functions we frequently see outsourced include trade execution, risk analysis, and repetitive operational tasks.

Trade execution: If your organization is one employee deep in its trading function, that person occasionally needs to go on vacation, leave the office, or contribute elsewhere. So, the likelihood that you can rely on one person for all trading activity and never face a scheduling conflict is low. When you add a backup person that steps in rarely, they likely can’t maintain the same institutional knowledge, market experience, and trading intuition that comes with frequent hedge execution. Even with two traders, you still face scheduling constraints and the inherent limitations of knowledge that any two individuals can possibly amass throughout their careers. That’s why it’s common for organizations to rely on a wider bench of hedging resources — accessing experts who trade all day, every day across numerous clients, which brings them more market color than any one individual seeing only their own organization’s trades.

Risk analysis: For companies conducting a periodic review of their exposure profile and hedging strategies, it can be a material draw on resources to gather data from business units and run analysis to gain insight into the risk profile versus working with a partner who has visibility into how other corporates model their risk and inform stakeholders. Leveraging proven models and scenarios can be more efficient, accurate, and impactful than building custom models, obtaining the right data sources, and determining the appropriate methodology in-house.

Temporary support: When companies are faced with extreme staffing changes, due to high turnover, spinoff, or business reorganization, many will choose to employ a temporary outsourced staffing model to maintain operations while a more optimal staffing model is designed. While this is typically more costly on an annualized basis, it can afford a company the breathing room to make more effective long-term decisions around structure and hiring.

7. Plan for ongoing policy and governance

After you’ve reimagined and implemented your risk management infrastructure, plan to review and improve it at regular intervals. Periodically conducting a comprehensive review ensures greater confidence in the program from investors, the board, senior management, and other stakeholders. As markets and business practices change, regularly reviewing and comparing your governance and policy documents against leading practices for risk management elevates the level of assurance that treasury can provide to senior management teams.

Rather than reacting to the "Great Resignation," viewing it as an opportunity to review and reimagine your treasury program can position your organization to thrive in today's high-turnover environment and beyond. Chatham can partner with you throughout the process, whether it's providing continuity after an employee departure, conducting process documentation and policy review, or streamlining your program with financial risk management technology. Contact your relationship manager or complete the form below to get started.

Chatham Financial corporate treasury advisory

Chatham Financial partners with corporate treasury teams to develop and execute financial risk management strategies that align with your organization’s objectives. Our full range of services includes risk management strategy development, risk quantification, exposure management (interest rate, currency, and commodity), outsourced execution, technology solutions, and hedge accounting. We work with treasury teams to develop, evaluate and enhance their risk management programs and to articulate the costs and benefits of strategic decisions.