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5 Ways to Get Your CFO’s Attention

Many companies neglect to align compensation with their business strategies, much less integrate it into key functions like talent acquisition, retention, and succession planning.

But if you want to get your CFO’s attention to drive positive talent business outcomes together, our guide shows which compensation metrics are essential to report on.

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5 Ways to Get Your CFO’s Attention

Unfortunately most companies neglect to fully align compensation with their business strategies, much less integrate it into key functions such as talent acquisition, retention, and succession planning. However, if you want to get your CFO’s attention and drive positive talent business outcomes together, it’s important to measure and report on these five compensation areas.

Pay for Performance

Your CFO wants your talent strategy to align with the company’s business investment strategy.Ensure high performers are paid accordingly and underperformers are not overpaid. Your CFO can help shape your pay for performance strategies and processes by getting to know your internal and external shareholders’ expectations through their interactions with executive management, analysts, and major investors.This collaboration ensures that your company’s and individual contributor’s performance metrics reflect business outcome expectations when shaping short-and long-term compensation plans.

Risk and internal controls

Executive compensation plans are critical to attracting, retaining, and motivating leadership. Work with your CFO to establish rigorous processes to understand how incentives influence employee behavior, how those behaviors exacerbate risk, and what steps or controls will mitigate the risk. Monitoring and adjusting the right incentive metrics and “stress testing” possible payouts under various internal performance scenarios will minimize risky behavior.

Revenue per employee

Revenue Per Employee is one of the most useful ratios to compare business performance with competitors, and is a key indicator of how efficiently your company is performing compared to your competitors.Ideally, your company wants the highest revenue per employee possible, as it denotes higher productivity, something that will make your CFO, and the entire executive team smile.

COMPENSATION REVENUE RATIO

This important metric describes how much was invested in employee compensation in order to generate revenue. Over time, this metric illustrates if your organization is obtaining more or less return on every dollar it invests in its people. For Example: If your Compensation Revenue Ratio is 26%, you are investing an average of 26 cents in compensation to generate one dollar in net sales.

Average compensation per employee

Most organizations struggle to maintain a balance between cost management and competitive compensation when vying for talented employees.This metric is an assessment of an organization’s compensation levels relative to competitors. It can also be monitored by job families, job grades, or by management levels of the organization when benchmarking to external data.