Treasury & Risk:  The executive summary of the '2022 Global Treasury Survey' report says: 'Many organizations shared that they are looking to right-size their organizations, along with evolving their capabilities by adding new skills they believe are required in the future treasury organization.' How is Deloitte seeing treasury teams evolving in terms of headcount and skill set?

Niklas Bergentoft:  This is something we're seeing in the real world, as well as in this research. Companies are trying to build a fit-for-purpose organization. Larger organizations have trended toward downsizing, whereas many small to midsize organizations may be adding treasury staff.

Small to midsize treasury organizations have felt the pain of talent constraints over the past few years. Many spent the pandemic struggling to respond to increasing asks of the treasury organization, not to mention challenges related to executing on strategic initiatives and trying to expand the capabilities of their treasury team. Headcount challenges have certainly been evident in many small to midsize treasury organizations, whereas cost reduction has been a focus with many larger treasury organizations. So, on both ends of the spectrum, organizations are striving to build a more fit-for-purpose organization.

For me, the survey's bigger—and highly encouraging—data point around staffing is the focus on building treasury departments with a more diversified set of skills.

T&R:  I noticed that too. Your report ranks the skills that are most important for treasurers, and a lot of what we've traditionally considered 'soft skills' made the list. In fact, the number-one category of capabilities for the treasurer of the future was 'leadership and management skills.'

NB:  That's right, and I think those results are really encouraging. The previous several editions of our biennial 'Global Treasury Survey' have brought to light the broader impact that the treasury organization can have on the company. But driving enhanced value to the organization will require a variety of skill sets.

A decade ago, many organizations prioritized a really deep technical background in treasury—capital markets, financial risk, treasury operations, bank relationships—when hiring a treasurer. That knowledge is still important today, but now we often see strong finance leaders being appointed treasurers.

The goal is to find a treasurer who will drive enhanced organizational value, so the hiring focus tends to be on leadership skills, broader finance or business experience, and digital and communication skills, along with technical treasury knowledge. I believe that because of this shift, we see more and more finance leaders spending time as treasurers on the way to the top job in finance—the role of CFO.

T&R:  I also saw that 'business and finance skills' ranked second in your research, in terms of the most important capabilities for the treasurer of the future, and 'communication and negotiation' skills ranked fifth.

NB:  I think these are all skill areas that treasury professionals are going to need going forward: leadership, business, technology, communication. Respondents' selection of business and finance skills as the second-most-popular treasurer skill set seems to represent a broadening of the treasury function. Today, more than ever before, treasurers need to focus on connecting with internal customers and understanding the core business that their function is serving.

Having 'business and finance skills' rated second tells me that companies are expecting their treasurer to be increasingly nimble and agile. Considering that leadership skills ranked at the top, it seems treasury groups are preparing to help guide the business around some of the most impactful liquidity and risk management issues.

Then, the fifth-most-popular skill set—communication and influencing skills—is obviously very important when treasury leaders are telling the story of their agenda and the value that the treasury function provides to the organization. These skills are also crucial for building relationships, not just with other internal functions like finance and tax, but also with the business units and externally with ratings agencies and banks.

T&R:  You mentioned technology too, and I see that 'technology and data management' ranked as the fourth-most-important type of skills for the treasurer of the future. But I also noted that 72 percent of respondents said insufficient knowledge of what's possible with treasury technology is creating problems for their organization. To what degree does the treasurer herself or himself need to be tech-savvy to be successful?

NB:  Well, the treasurer definitely needs to understand technology and know how to lead initiatives around it. That involves using the business savviness to frame and quantify a compelling business case; leveraging communication and influencing skills to obtain support; and then using their leadership, project management, and technical treasury skills to get the initiatives executed.

This goes beyond the scope of the survey, but I think leaders have a responsibility to understand how technology can better enable their function, as well as the skills required to enable digitalization, drive continuous improvement, and enhance the value the treasury organization can deliver (both internally and to shareholders).

In working with clients, I find that treasury leaders are often well-educated on what treasury management systems can do. But there sometimes is a knowledge gap around how other technologies can support the 30 percent or 40 percent of their needs that the treasury management system can't meet. Many professionals don't know what other technologies are available to augment the treasury management system.

T&R:  And then 74 percent of respondents to your survey are concerned about the limited talent pool for implementing technologies.

NB:  Treasury software deployments—or digitalization journeys into broader automation and analytics—are often large efforts. In many cases, these efforts are bigger than the organization anticipates.

Internal staff trying to manage these projects incrementally often have difficulty juggling their day-to-day responsibilities alongside the projects, which often results in longer projects with diminishing returns. Alternatively, a treasury group might use external resources to backfill day-to-day operations, in order to free up people for a major treasury technology initiative. Or management might hire an external consultant to fill most of the implementation roles. In any of these cases, the organization might underestimate the effort required and fail to properly plan staffing to account for the effort that the project will require across treasury, accounting, IT, change management, and other functions.

Proper due diligence and planning are important. Treasury groups need to understand, staff, and effectively plan for these projects up front. They should also understand that vendors looking to sell their software might not highlight the true effort required for a larger technology initiative.

T&R:  What should treasuries be doing differently for 2023 around talent management?

NB:  The survey points to some specific skill sets that management teams should be looking for and developing. Treasury leaders need to think through how they can attract and retain a diverse and tech-savvy treasury team. They should provide opportunities for teams to develop leadership skills, broader finance and business knowledge, and digital skills. Professional development should encompass communication and influencing skills along with deepening the professional's knowledge in the treasury space. Ultimately, I believe, this approach will enable treasurers to develop strong finance leaders for their organizations.

One other big takeaway from the survey is the growing focus around ESG [environmental, social, and corporate governance] issues. I'm getting pulled into more conversations around ESG. As you can see in the survey, ESG came out as one of the top three regulatory priorities for our survey respondents.

While ESG guidelines or regulations are pending, the treasurer, just like other finance leaders, has a very important role to play in this domain. Treasury leaders should get engaged in work with their organizations to frame their role, goals, and specific actions to drive or support the organization's agenda around diversity and broader social issues, as well as environmental aspects of the ESG equation. I believe the treasurer can take actions around ESG that will have a direct and positive impact on attracting and retaining top talent and investors.