Discover Your Career Path Options
At some point in your career, you pause to reflect on where you want your finance journey to take you. It may have been prompted by a headhunter call, asking you to consider a tantalizing opening outside your firm. It could have materialized as you look at your recent accomplishments and feel underwhelmed by the level of project work assigned to you. Then again, it could be that you are ready to take on new and more challenging analytical assignment which left you wanting more. The bottom line is: are you happy where you are, or are you ready to play a higher impact role in your finance game? Is FP&A worth it as a career?
Demand for FP&A Talent
Whatever has prompted you to reflect on the future of your career, many options are available, allowing you to grow either as an individual contributor or as a manager in FP&A. But can you look to a secure future? Will there be sufficient demand for FP&A resources to warrant a shift in your career focus? Antidotal evidence appears to suggest so with a Larysa Melnychuk, Founder and Managing Director of London FP&A Club citing in a recent article entitled Top 5 FP&A Trends and Challenges that, “There is a high demand for fresh FP&A talent in the marketplace. The demand drives the supply.”
Arguably the FP&A profession has been around since Robert McNamara and his band of Whiz kids turned around Ford, but it still too ambiguous of a job function to be classified by the Bureau of Labor Statistics (BLS), so let’s extrapolate to estimate a demand for FP&A talent in the US over the coming decade. As I have stated in previous articles, FP&A is charged to do many different things within a company including but not limited to budget and planning, operations analysis, financial analysis, management analysis and general financial management. Luckily BLS has job classifications that fit those areas. Assuming that an FP&A job function would accompany each part of these job functions equally, then we can average their growth rates to see where the demand for FP&A talent may be in the coming decade.
Below is a summarized table of key occupational outlooks taken directly from BLS’s Occupational Outlook Handbook.
2015 Median Pay
Job Outlook, 2014-24
|Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.|
|Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.|
|Management analysts, often called management consultants, propose ways to improve an organization’s efficiency. They advise managers on how to make organizations more profitable through reduced costs and increased revenues.|
|Operations Research Analysts||
|Operations research analysts use advanced mathematical and analytical methods to help organizations investigate complex issues, identify and solve problems, and make better decisions.|
|Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.|
How about salary? According to the US Census Bureau, Median Household Income was $53,482, which means that someone that chooses to seek an FP&A skill set should receive a compensation that is at least 60% greater than the national average.Is this good or bad? The average projected job growth rate for all jobs in the US from 2014 to 2024 is 7%, so based on the table above, an FP&A skill set should be at a demand of almost than the national average. It also appears fairly balanced as it includes jobs that are below the national average, like budgeting, sat the national average, financial management, and dramatically above the average, like operations research analysis.
Based on this completely unscientific analysis, it appears that if one chooses a path that gave you the skills that an FP&A career path provides, you would have plenty of options and wind at your proverbial career back for future growth.
You Got Me! So What’s the Career Path of an FP&A Professional?
Like everything else in life, it depends. Below is a typical FP&A career path
within a product & service firms, outside of the banking, investment & financial planning industries, which may have different titles and tracks.
1 Financial Analyst—Associate or Entry Level
If you recently became a financial analyst, congratulations on being part of the FP&A community!
At this stage in your career, rather than thinking of advancement, think instead of absorbing as much as possible of how your company operates, the systems that assist in adding value to your products & services and what comprises a month-end close. You need to absorb as much as you can of your firm’s operations, while fulfilling your prescribed roles.
Your work will initially not seem glamorous; in fact, rather slow & tedious, as your knowledge of your firm & its systems is at this point rather limited. Be patient & concentrate on building your practical finance knowledge.
At this juncture, the ‘picture’ of the company may be only a small slice of the business, supporting a single product line, functional area, or arm of accounting. Your personal challenge at this point is to learn how your business slice contributes to the well-being of the entire firm & help that slice perform better. Good luck!
2 Sr Financial Analyst & Finance Project Lead
Consistent, successful performance on assignments and good communication & networking skills with managers will provide you opportunities to assume more expansive assignments, developing & leading finance projects. Within small firms, this could include managing the annual financial plan, while playing an active role in building or enhancing the financial reporting processes.
Alternative assignments within large firms could be providing high-level financial support for engineering, HR, IT, insurance, operations, marketing, or sales teams. Don’t be fooled that by not managing a complete P&L prevents you from growing your career. This will offer opportunities to become well versed in how powerful your group contributes to new products, staffing, information systems, financial security, manufacturing, business development & revenue generation.
There may be some opportunities to have a small staff reporting to you, depending on budgets, reporting needs, amount of clerical work to support your team and what you have contributed, which is valued by the people you serve. Make them proud of what you and your team can deliver!
3 FP&A Manager
There is no automatic progression to a management role in financial analysis. It’s your call if you enjoy the hands-on pleasure afforded to you, having a small financial analysis team, or want to manage a team of financial analysts, acting as a guide, mentor & leader.
Such positions may be responsible for an entire firm’s finance team, or functional or regional team, called at times controller, or financial reporting manager within large firms. You must be prepared to shift focus from preparing analysis to presenting, reviewing and discussing work largely developed by your team, attending meetings regularly. This is a great opportunity for those of us having a big picture perspective. Here, you can more readily develop finance strategies to address major business problems.
Note that some FP&A management positions are involved in preparing SEC reporting packages. In these instances, companies generally prefer a financial reporting analyst with a CPA.
4 FP&A Global Sr Financial Analyst/Manager
Are you ready to up your game, whether you are an individual contributor or a manager? Beyond national financial planning involving a single currency & one legal system is planning of multiple legal entities for a global firm.
The global environment has a considerably higher level of complexity, likely involving multiple currencies, translations and foreign currency risk exposures. There will be different country tax computations and in-country reporting requirements to learn. Treasury functions will include arm’s length agreements between legal entities for goods & services, entity funding of operations, along with differences in how funds can be repatriated. The challenges are boundless, in this environment. Cut through ever-present Gordian Knots in global business and you will be forever in high demand.
International travel opportunities are best found here. Better keep your passport current, while sharpening any of your foreign language skills.
5 Director/Senior Director of FP&A
Once you have cut your team on either a global scale or large domestic projects and are well trusted and/or experienced in meeting the needs of senior management needs and financial analytic techniques, it’s time to step up to the Director level and lead a team, division or business unit. Think of a Director like a Colonel in the military. They are the field generals that are the working the numbers with the heads of the business, or major projects day in and day out, making improvements, allocating capital and adding value. Many times, they are the de-facto CFO for a certain region or group within an organization.
Just as in other areas in FP&A management you could have a staff or work independently, but this is where your communication skills will begin to overshadow your analytic skills. Those that can best communicate, coordinate and manage the complexities of the reporting and presentations will succeed at this level and be ready to move to a VP of CFO level of they choose.
6 Business Operations Management
A few of us see ourselves as being constrained, functioning exclusively within finance. Our favorite motto & song must be, “Don’t Fence Me In”. Somehow, our previous work feels to us like an audition for a different career. We’re an honor student on how our business functions; the systems operations relies upon us to assess their performance; and the initiatives that we participated in developing, or personally advanced. We want to lead a business operation, rather than perform exclusively in an advisory & reporting role.
Here’s where an extensive knowledge of a firm’s product costs, ERP systems, channel fulfillment & operating challenges will make this opportunity a viable option. We won’t miss you. You just became a Finance Ambassador, from our perspective.
7 Vice President or Chief Financial Officer (CFO)
At this point, your business acumen, leadership skills, deep understanding of accounting and financial planning systems is well recognized, taking you to the top of the FP&A & accounting organization. Your time is heavily engaged in designing and building your finance & accounting system and organization to accommodate future needs of a business, working closely with a firm’s leadership team and outside constituents.
Your profile is typically one having a successful, early FP&A career, holding an MBA and/or CPA/CMA credential and impeccable communication skills with strong and relationships across an entire leadership team at the C-level.
An FP&A careers can provide constant challenges & excitement, offering one of the best seats in the house to view business performance. It also has the privilege to play in the game as an advisor, developing and analyzing play options for the company’s leadership teams.
Half-time’s over. It’s time to get back in the game. What position are you ready to play?