As thought leaders on interim management, every quarter we look ahead at what businesses need and apply thought-provoking insights from incredible interim business leaders, each with their own perspective. For the fourth quarter, here are expert insights from David Faulds on finance to help you advance your goals in Q4 and into 2022.
Looking back on the first three quarters of 2021, what are some key takeaways for you?
Most companies during the past nine months have been experiencing resource planning issues, and as businesses have tried to normalize their operations, they have also been faced with supply chain shortages or delays in getting product, which in turn, has affected their vendor and customer relationships (i.e., pricing and delivery commitments). Many companies have had to renegotiate their purchase and sales contracts several times and manage pricing and delivery expectations for their customers, while at the same time, controlling their supply landed cost including freight and demurrage as these transportation costs have skyrocketed.
As a part of resource planning, companies have had to deal with human resource issues regarding the new COVID-19 regulations mandated and imposed by the cities and states throughout the US. The fear that an employee or contractor can litigate when companies require vaccination or masking is causing HR to constantly monitor the wellness of the staff and make sure they properly communicate these rules in an acceptable and humane manner. These are very testing times for those departments!
From a talent perspective, what should companies be focused on (and why)?
The biggest complaint I hear from clients is the shortage or lack of quality talent available for open job/ contractor postings. This is causing hiring decisions to be either extremely delayed or rash hires being made with rehire consequences. Companies need to leverage their own internal staff more effectively, provide training and cross-training—so they can better navigate those stressful times when open positions cause work to back up or overload another employee. Their best course is to be patient and hire the right person, use their own HR recruiter or external recruiter to target hiring prospects and be willing to offer pay rates sufficiently above the existing pay when wooing away the best talent. During this period, it’s likely that employee turnover rates will increase, as other companies are trying to hire away your best, underpaid talent.
My suggestion is to review all salaries and pay rates for hourly employees, adjusting now to ensure you keep the talent, and then go after prospective employees or contract-to-hires, making sure that you are properly onboarding these new hires weeks before they can change their minds.
For Q4, what strategies or tactics are you recommending to your clients to finish the year strong? What should they be doing to set themselves up to be successful in 2022?
The best strategy for the existing supply chain dilemma is to set the mindset and expectations of all customers toward the likelihood of upcoming contract pricing and term changes during these impactful COVID-19 times. Everyone needs to be more flexible. Remember to stay in constant communication with all your customers— don’t leave them in the dark about what’s happening with shipments and delays!
From a purchasing perspective, there may be opportunities to add more buying agents and staff to elevate the sourcing to other suppliers. This effort will more than pay for itself when you find new suppliers with better pricing and terms, thereby creating more room for margins in case you can’t pass on the next cost increase.
Make continued improvement in systems and processes, and prioritize key IT projects, as you may need to maximize your existing talent pool. As they become more efficient, there will be less strain on the team and the need for new hires. HR should focus attention on improving all employee benefits to ensure retention during the upcoming year. Management needs to be continually searching for new talent. Don’t wait until you need a replacement for a key position— look for that talent early.
About David Faulds
David Faulds is a financial executive with a strong background in finance, systems, and accounting. He specializes in process development and improvement and has extensive experience in financial and SEC reporting, due diligence for sales and acquisitions, new financing, setting up new accounting systems, and cost reduction programs. David is a CPA (active) in California and has an MBA (International Business) from a prestigious UK university.