Source: KPMG Corporate Treasury News, Edition 43, May 2015 - Admittedly, the financial crisis has helped a number of former treasurers find their way into the role of chief financial officer. It is also true that treasury experts are a valuable, sought-after species whose salary structures are lucrative indeed. These two facts could be taken as powerful evidence of the growing importance of treasury functions; and that is probably true.
However, if you also take them as evidence that treasury functions are the new career springboard, be warned!
Corporate treasuries have by no means reached par status with controlling or even accounting departments. Of treasurers who have been promoted to the role of CFO, it is often said that they "can't read (the balance sheet)". They, incidentally, are the same ones who think they can use EBITDA to pay the bills. I am not interested in the comparatively small number who make it to the very top. I am more interested in the young, ambitious treasury staff who not infrequently come armed with outstanding master's degrees and other qualifications, strong analytical skills and the ability to recognize connections and correlations (within the company). These are the people who concern themselves with the (financial) markets and are thus close to the front line, to the risks that affect the company. If you've ever grappled with foreign exchange, interest and sovereign risks, you know what the company has to prepare itself for. In the first two to three years, these people flourish and grow, learning quickly and copiously and succeeding in their projects. And then? Then, many find themselves in a protracted holding pattern, waiting for the head of the group, department or even the treasurer in person to "move on to new challenges". Some may at least make the switch from topic A to topic B in the meantime. In many cases, however, even just making the "leap" from cash management to the middle office constitutes an insurmountable barrier.
Those who tire of waiting and opt for a sideways move (to another, bigger company and/or more complex requirements) often find themselves back to square one – and discover too late that they have missed their step on the career ladder. Meanwhile, the people they started out with in accounting or controlling (remember the fun groups that attended the high-potential junior management sessions?) are now heads of accounting or controlling, or even CFOs at domestic or foreign subsidiaries.
So what is the moral of the story? Applicants and employees looking for a new career move beware: When you go for an interview, ask specifically about development prospects outside of the treasury function. Get the names and phone numbers of people who exemplify the kind of personal and career development you are looking for. Talk to your personnel consultant about how they rate the company in this regard. If the answers are not to your entire satisfaction, stay away from both the company and the personnel consultant! My advice to companies and corporate treasuries in particular is this: Create a culture that lets good people keep developing and moving. After three or four years at the corporate treasury, young staff should have the opportunity to experience significant further development within the company. Why not make a young treasury employee CFO of a small foreign company? That will help spread corporate HQ's DNA throughout the group. But it will also yield other direct benefits for the treasury: more strongly motivated staff and more effective collaboration, as people devote less energy to fighting for the boss's job. Greater fluidity creates ongoing development opportunities and makes treasury functions more attractive to career beginners. Lastly, one very important point is that your treasury performance will improve significantly. Why? Very simply because you will have fewer people preserving the status quo and more who are not afraid of optimizing processes and workflows – or even of making their own work superfluous. In this kind of culture, such individuals know that the company will always find a place for people like them, in almost every conceivable function.
These companies exist, really. You just have to ask.
Author: Carsten Jäkel, Partner, firstname.lastname@example.org
© 2016 KPMG AG Wirtschaftsprüfungsgesellschaft, ein Mitglied des KPMG-Netzwerks unabhängiger Mitgliedsfirmen, die KPMG International Cooperative (“KPMG International”), einer juristischen Person schweizerischen Rechts, angeschlossen sind. Alle Rechte vorbehalten.
KPMG International erbringt keine Dienstleistungen für Kunden. Keine Mitgliedsfirma ist befugt, KPMG International oder eine andere Mitgliedsfirma gegenüber Dritten zu verpflichten oder vertraglich zu binden, ebenso wie KPMG International nicht autorisiert ist, andere Mitgliedsfirmen zu verpflichten oder vertraglich zu binden.