New report from Chartered Institute of Management Accountants and American Institute of CPAs reveals need for new measures and structures as companies reinvent their workforces for agility.
Organisations around the world are rapidly reshaping their workforces with a complex mix of internal teams and external talent, outpacing their ability in many cases to effectively manage costs, performance and decision-making, according to new research from Chartered Institute of Management Accountants(CIMA) and the American Institute of CPAs(AICPA). Organisations are increasingly relying on consultants, contractors, freelancers and outsourced providers as they seek greater operational flexibility and agility in developing new ideas, according to a survey of more than 1,100 senior executives conducted by Longitude Research on behalf of the AICPA and CIMA.
This shift to the “open workforce” is expected to accelerate in the next five years, with more than a third of those surveyed expecting at least half their workforce to be made up of such external talent by 2020. Many organisations are encountering significant challenges as they adapt. Only about two in five executives surveyed said that their organisations have high levels of oversight on the cost, performance and productivity of the external resources they use. They face risks of data breaches and disclosure of competitive information and struggle to maintain consistent quality decision-making at all levels. It’s also particularly difficult to strike the right balance between control and empowerment. Nearly two-thirds, 62 percent, said they are struggling to get the mix right or feel that they have it wrong.
CIMA and the AICPA released the findings in a new report, “New Ways of Working: Managing the Open Workforce,”at the World Congress of Accountants in Rome. The organisations are Imperial sponsor under the banner of their joint Chartered Global Management Accountant designation. Charles Tilley, FCMA, CGMA, CEO of CIMA commented: “The converging forces of globalisation, digitisation and market flux have given rise to a powerful new force – the open workforce. This trend holds the potential for new levels of agility, creativity and cost savings, but most organisations aren’t yet equipped with the controls and practices necessary to maximise opportunities and offset risks.
Management accountants must play a critical role in creating the frameworks and discipline required to unite today’s disparate organisations and their more fluid workforces.” The global survey, which spanned 35 countries, showed strong interest in deeper engagement with the finance team. Nearly nine in ten executives said that a closer partnership with finance in the decision-making process would help them better manage their organisations in the coming years. The same majority also want a better process to pull insight from financial and non-financial information and a way to model value creation to make the benefits and risks of opportunities clearer.
While all organisations are struggling to find the right balance, executives who said their organisations are outperforming their peers also showed higher propensity for leveraging the open workforce. Among other factors, high performing organisations are better at balancing control and autonomy and are more likely to have the tools, strategies and frameworks in place to manage these complex structures.Barry Melancon, CPA, CGMA, President and CEO of the AICPA said: “Adapting to the open workforce will be a defining challenge for business leaders over the coming decade. Finance teams must take a leadership role to make sure agility does not erode accountability. They must equip organisations with the tools, structures and insight to balance the benefits against the risks and keep organisations on a path to long-term sustainability.”
