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Finance
Why CFOs need to become “keepers of culture”
Technology is changing the economics of recruitment. But Randstad CFO Jorge Vazquez argues that investment alone will not deliver transformation: finance leaders also need to inspire employees that change is worth it.
Rapid read:
- Recruitment is being reshaped by skills shortages and more flexible patterns of work, requiring companies to make better use of talent even in small pockets of availability.
- Digital platforms and AI can improve both the experience for workers and clients and the economics of recruitment, but only if they reduce complexity rather than simply automate existing processes.
- CFOs have a critical role in transformation beyond investment decisions: they must help employees understand the story behind change and build the energy to deliver it.
After several challenging years, recruitment markets are finally beginning to recover. But Jorge Vazquez, CFO at global talent company, Randstad, which is headquartered in the Netherlands, does not expect the industry to return to its pre-pandemic model. Covid accelerated changes in how people work. Freelance work became more popular, as did a “portfolio” approach to work, with multiple sources of income. Vazquez argues that for recruitment companies, this development creates both a challenge and an opportunity.
“I think the world underestimated how impactful Covid was on the world of work,” says Vazquez. “We are only now starting to see more ‘normal’ behavior. In other words, people changing jobs or looking for their next opportunity, and companies deciding it is time to hire people with new skills.”
Making scarce skills go further
But the recovery has also brought into focus the ongoing shortage of skilled workers. Aging populations are limiting labor supply just as technology change and investment increase demand for specific skills. Vazquez points to growing demand for healthcare talent as well as skilled tradespeople, such as electricians and welders – a trend driven both by investment in new areas such as data centers and by the need to maintain legacy assets.
The constraint is prompting companies to think differently not only about where they find workers, but how they make use of the skills already available. In the Netherlands, for example, healthcare professionals who work through Randstad may already have jobs. They can make themselves available for additional shifts when they have spare time, such as on a Saturday. In a talent-scarce world, there is value in being able to use all the available talent: matching pockets of availability with demand and upskilling others.
In this environment, society needs to make better use of the people that are already available, even if it is a relatively small portion of their time. But doing that on a large scale requires the right technological infrastructure.
From recruitment service to seamless digital experience
Vazquez compares this shift with the evolution in retail banking and other consumer services. In the past, customers would occasionally visit a physical branch to conduct a relatively small number of transactions. Digital banking has transformed this into a seamless relationship spread across different channels. Recruitment, he argues, is making a similar transition. Randstad uses digital platforms that allow workers to identify and select opportunities themselves.
According to Vazquez, almost 60% of people interacting with Randstad’s apps now do so after 7 p.m., when most of the company’s physical offices are closed. In this context, digitalization can do more than automate an existing interaction – it can allow an interaction that might otherwise be impossible.
Digitalization could also change the underlying economics of Randstad itself. When Vazquez became CFO, he found that, despite successive waves of technology adoption over the preceding 25 years, the labor-intensive economics of recruitment had barely changed. In general terms, serving more clients and placing more candidates required Randstad to employ more staff.
“It had clearly been challenging to build any type of scalability in recruitment over the past 25 years,” explains Vazquez. “Our industry had not yet digitalized its services. But that is changing now, and it’s an exciting time as a result.”
But for Vazquez, improvements to the customer and employee experience – and changes to the underlying economics – must happen in lockstep. Accordingly, technology should be assessed on its capability to effect both simultaneously. He includes AI in this. Randstad experiments with applications and agents, measures performance and adjusts its approach.
But for Vazquez, improvements to the customer and employee experience – and changes to the underlying economics – must happen in lockstep. Accordingly, technology should be assessed on its capability to effect both simultaneously. He includes AI in this. Randstad experiments with applications and/or agents, measures performance and adjusts its approach.
An early AI-enabled finance application illustrates both the potential and the difficulty in achieving that balance. Each week Randstad processes timesheets and expenses for around 600,000 people, in formats ranging from integrated digital systems to spreadsheets and handwritten forms. AI proved capable of interpreting all this, but an early iteration was prohibitively expensive. By changing models, rerouting tasks and using simpler technologies where possible, Randstad brought the processing cost down and created a blend of efficiency and effectiveness.
“The cost side and the cost-to-serve are relatively easy to understand,” he explains. “But the really exciting thing about AI is what else you can do with the experience you provide and what this means for our own people, spending time where it matters.”
In practice, that could mean same-day payments to workers, or improving the service to clients and accelerating invoicing. Together, these areas improve the experience offered and deliver benefits for Randstad’s working capital position.
We want to become a better partner for our talent and clients, so you need to keep challenging the art of the possible.
Beyond the numbers: people and culture
For Vazquez, the CFO’s role in transformation does not end with determining where to invest or measuring the returns. Finance leaders also need to consider a less tangible factor: whether employees understand the changes being asked of them and want to make them happen.
“Deciding where you need to transform, or what the right path is, isn’t necessarily the most difficult part,” says Vazquez. “The question is whether people buy into the idea. That is about accelerating and multiplying change through people; exciting them with the idea. Listen to people and make time to move more quickly and with a lot more determination. If you do so, you’ll see the organization move more quickly and with a lot more determination.”
Vazquez puts culture and employee engagement unusually high on his agenda as CFO. Randstad measures engagement closely and its senior leadership team reviews comments from the company’s 38,000 employees. Vazquez also devotes significant time to company-wide town halls. “As a CFO, the last thing you want is an organization with no energy and a sense of complacency,” he says. “Excitement, drive and thinking like a start-up are a big thing for us.”
Vazquez also sees finance as having a strong influence on how employees understand the company. The function has access to much of the data through which performance is measured and communicated. In his words, finance “holds the pen.” That gives the CFO significant influence to decide the story that the numbers tell. Rather than beginning a town hall by discussing revenue and profit, Vazquez might point out how many people Randstad has helped into work and how many are new to the company.
“Our job as leaders is to keep challenging the organization, because we need to keep improving,” he says. “We want to become a better partner for our talent and clients, so you need to keep challenging the art of the possible. But you can explain that it is an exciting journey, rather than just a numerical journey.”
For Vazquez, finance can help determine where the company should invest and whether those investments are producing returns. But getting the numbers right is not sufficient if employees fail to understand the direction of the business or their part in it. “Being right can only take you to a certain level,” he says. “Making it part of why people wake up in the morning to come and work for you is probably the most important thing.”
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