How to keep the talent pipeline flowing
How to engage Millennials and foster loyalty among this reputedly fickle group are key concerns for businesses across the world. Matt Miller, ACMA, CGMA, talks about the initiatives BAE Systems has put in place to develop and retain a steady stream of high-calibre talent.
To understand the state of talent management, look no further than the Millennial.
This demographic — generally defined as those born from the early 1980s to around the turn of the millennium — will make up 75% of the workforce by 2025, according to Deloitte. This workforce sees spending a career at a single company as an anachronism, research shows, and its members are unafraid to switch employers as often as it takes to get the experience and opportunities they crave.
Employers who fail to deliver career development opportunities could face rapid staff turnover, along with a negative impact on productivity and the costs associated with that. Meanwhile, employees who move from company to company too often could cause recruiters to wonder about their commitment, skill level, or ability to get along with others.
Staying with the right company can have benefits for employer and employee alike. The question, then, is: What can companies do to engage the workforce of the future and foster loyalty? Ask BAE Systems, which carefully develops its talent pipeline.
The defence contractor focuses external recruitment on entry-level positions through its finance leader development programme. It also is using a new finance apprenticeship scheme. Through both programmes, BAE demonstrates that there are real opportunities to progress within the company and a defined path to the management levels. New recruits only have to look to the board of directors to see the merits of this approach; many board members joined the company as apprentices.
Matt Miller, ACMA, CGMA, is proof of the value of investing in the talent pipeline.
Since 2002, when Miller, now 34, joined BAE through the finance leader development programme, he has held nine positions, allowing him to gain experience in a number of business units around the world, all under the BAE umbrella. The skills and deep knowledge of BAE’s operations that he gained along the way have helped him reach his current post of finance director of the company’s combat vehicles unit in the UK.
This talent pipeline strategy fits into the overarching BAE philosophy of building the company up from the ground floor. “Instead of hiring new managers, what we want to do is keep filling up the bottom [entry-level roles] because we’re gradually increasing the intelligence of everyone in the organisation,” Miller said. “So you keep creating more and more roles at the bottom and keep the promotions going.”
The approach is key to the company’s growth plan. This philosophy arose out of a talent pipeline review ten years ago. BAE Systems’ focus on long-term projects — sometimes up to 15 years — means the company looks for a specific skillset that is not easily found when recruiting. Developing homegrown talent provides a means of generating those skills, as well as re-establishing company culture and internal controls and encouraging staff to be the conscience of the business.
To keep the talent pool going, BAE Systems has graduate and apprentice programmes, with a group of individuals regularly moving around the business learning cultures and different ways of working, then taking the best of all of those and applying that knowledge to the next roles that they move into.
“We are now starting to see the fruits of that with so many high-calibre people knocking at the door,” Miller said. “The new challenge is how to keep all of these people that we’ve developed to such a high standard busy.”
To capitalise on this homegrown talent, the BAE finance function has a rigorous succession planning process whereby each business conducts a functional review of its talent to identify high-potential candidates. At a UK finance development forum, representatives of each business discuss their candidates and how they are being developed. An independent representative talks to candidates to assess their skills, potential, and whether they are willing to relocate, as well as the time frame for their development. As roles become available, there is a talent pool ready to tap into. The process has enabled the company to map out succession plans for each of the top 150 roles.
The approach proves motivating. “Personally, I want to make sure I’m always on that list of people that can be tapped up for the next role,” said Miller.
The apprenticeship approach
BAE recently extended its apprenticeship approach — which has been used to great success in engineering and other areas of the business — to the finance department. This year, Miller’s combat vehicles unit is offering apprenticeships in management accounting.
The programme works like this: Apprentices are offered real jobs and specialised training. On the job, apprentices learn about the finance and commercial business functions through a series of six- to 12-month placements as they work towards their qualifications.
Miller describes a possible scenario: One of the apprentices will provide the functional leads with the information they need to make decisions on how to reduce the unit’s cost base. He or she will also be looking at the way costing and pricing rates are generated.
<>Another apprentice will work on taking those hourly rates and helping to build up prices for new bids and new proposals for customers. He or she will then try to match that up with a milestone payment plan to ensure the company is as cash-neutral as possible. “We want to get them involved in business-winning early in their career,” Miller said.
The third apprentice will work in the project accounting team that helps support the execution of contracts.
All of this involves apprentices working with key stakeholders in various functions. Business partnering is an area about which Miller is particularly passionate.
After nine or 12 months, the company will swap the apprentices so that they can learn another person’s role. “If the business plan works, in 12 months’ time there might hopefully be a requirement for another apprentice on the project team,” Miller said. “Then we can start circulating the apprentices around, and over time develop them into good project accountants or cost-base accountants or reporting accountants, so they get a good grasp of the whole family.”
Miller believes that this training will not only provide a strong skillset for the business in the future, but also generate a long-term commitment to BAE from the candidates.
Further down the line, the size of the BAE group enables emerging finance talent to focus on the area or department of greatest interest to them. If they wish to take on a placement outside of the combat vehicles business unit, that option is available in the wider organisation.
Once apprentices have completed the three-year training programme, they can choose to continue to study to become a CGMA designation holder.
BAE’s three-year apprenticeship scheme could prove attractive to a diverse section of Millennials in the UK, where the cost of undergraduate study has been rising and job opportunities for graduates have been diminishing. Apprenticeship schemes such as BAE’s allow Millennials who may have been priced out of the traditional higher-education route to receive the kind of professional education they need to advance. From an employer’s point of view, professional education for participants younger than 19 is fully funded by the UK government.
Ultimately, the aim of BAE’s investment in the talent pipeline and engagement with Millennials is to create business partners and the management of tomorrow.
To some, that would seem like a sound investment.
Finance leader development programme
Another way BAE manages its pipeline is through its finance leader development programme, a five-year graduate training scheme whereby participants gain technical and communication skills, as well as experience in different areas of accounting, through placements in various business units.
Participants have the opportunity to influence their path, putting forward their preferences at each stage for the posts advertised by each area of the business. The skills and experience participants are looking for are matched to roles according to business needs.
Miller’s first placement through the scheme was in the avionics business in Kent. As part of the back-office team, he was involved in accounts payable, accounts receivable, expenses, treasury, management, and financial accounts.
The next assignment, working on head-up displays for F-16 fighter jets, gave him an introduction to project accounting as well as to the importance of liaising with the engineering and commercial teams.
He then moved to the company’s Hawk Synthetic Training Facility on the island of Anglesey in Wales. Miller was the management accountant, project accountant, and financial accountant all in one, operating the balance sheet, reporting, influencing, and dealing directly with the customer on a regular basis. He describes this as a key role in his progression because of the broad understanding it provided of running a small business.
He further developed his project accounting skills on the Hawk programme in Lancashire. The understanding he gained over the first two years of the graduate scheme of how the balance sheet comes together helped Miller ensure that robust project execution was in place. The next role, on Nimrod, a maritime reconnaissance aircraft, expanded his project accounting experience and combined it with cost-base and earned-value management, which were crucial in trying to bring a much delayed project back on schedule.
“I still look at those two years on Nimrod as the defining moment of my career, as I learnt the most and developed quickest,” Miller said.
Since he successfully completed the programme, Miller has continued to make swift progress up the career ladder (see “BAE’s talent management programme pays off”).
Although he was the first graduate of the company’s finance leader development programme to reach FD status, Miller is quick to point out that there are a number of others ready to step into top roles as they arise.
BAE’S talent management programme pays off
Matt Miller, ACMA, CGMA, is the first graduate of BAE Systems’ finance leader development programme to become a finance director. Here are the key rungs in Miller’s post-programme progression, and what he learned along the way:
- Financial controller, technical publications, Samlesbury, Lancashire, UK (2008–2010): In this role, Miller worked as financial controller of both an internal and external business that created technical publications for various customers. The job involved bringing the external part of the business in-house and rebranding it. Ultimately, the decision was made to close the business, so Miller worked with human resources on the staffing requirements and planned how to transition the remaining work.
- Head of finance, SBDCP, Riyadh, Saudi Arabia (2010–2012): Miller worked on the Saudi British Defence Co-operation Programme, which has a turnover of about £1.5 billion (about $2.4 billion). The role involved overseeing project accountants working on about 40 projects, as well as bidding for new ones, including a five-year, $15 billion project. Miller sought to bridge stronger projects with weaker ones to make sure targets were being met at any one time. Good project execution was essential as the programme was share-price-sensitive.
- Group financial controller, Combat Vehicles UK (October 2012–March 2013); finance director, Combat Vehicles UK (current role):In these roles, Miller’s focus has been on improving cash forecasting and the cost base. Now that he has successfully involved the finance team in the project execution stage, his next goal is to champion business partnering right from the bid stage.