Companies risk a CFO talent crisis by automating junior finance roles

The rise of artificial intelligence (AI) in finance is prompting concerns about a potential shortage of chief financial officer (CFO) talent. As AI technology automates routine tasks, such as reconciling accounts and data entry, junior finance roles are becoming less essential for developing the skills needed to become CFOs. Catherine Birkett, CFO of GoCardless, worries that the next generation of finance leaders will struggle to gain the necessary understanding of data and how to leverage AI tools effectively, as many of these foundational tasks are now automated.

Mark Freebairn, head of the board and CFO practice at Odgers, predicts that AI could eventually replace much of the accounting function, though it may not reach completion. This shift is leading to a narrowing of entry-level finance roles, with PwC reducing its workforce by 200 in the U.K. last year and many CFOs expecting junior roles to make up a smaller share of their finance teams within the next three years.

The change in structure, moving from a pyramid-shaped to a more diamond-shaped organization with fewer trainees, raises concerns about how future finance professionals will be groomed. Companies are increasingly relying on AI to develop better finance professionals, but this also presents challenges in assessing the right skills during the hiring process.

Traditional interview methods, such as data analysis assignments, are being replaced by assessments that test a candidate's ability to work with AI, understand its limitations, and think critically. With fewer trainees entering the profession, companies may struggle to find suitable candidates for CFO positions, especially considering the high turnover rates in the role.

The shift towards AI adoption also emphasizes the importance of technical expertise, as AI requires more technical competence than ever before. Companies like Bunq are taking innovative approaches to hiring, abandoning traditional CV screenings in favor of personality and abstract reasoning tests, to identify individuals who can think creatively and apply their skills effectively in a technology-driven environment.