Rethinking Recruitment: Automation In Finance Departments

People are the backbone of any retail business, but what if hiring additional staff is no longer a sustainable solution to managing a growing workload while still achieving results?

Approximately 75% of SMEs in Australia and New Zealand are struggling to compete for talent. Whether it’s continual increases in labour costs, an increase in job advertising costs, or a shrinking talent pool, attracting skilled workers at an affordable price is challenging. In fact, only 24% of businesses managed to expand their workforce in 2024.

The difficulties with maintaining staff are evident with 17% of new hires not passing probation, leading to increased recruitment and training costs. 67% of SMEs admit they are struggling to find suitable candidates citing high salary expectations as a key issue.

These difficulties have led to questioning the sustainability of recruitment and seeking out automation in the finance department to deliver a more cost-effective solution for managing growing workloads.

Source: Inside Small Business

The current landscape in Australia and New Zealand

In July last year, the Fair Work Commission implemented a 3.75% increase in the minimum wage. This adjustment is set to have a knock-on effect across all departments of retail businesses as employees demand a rise in salary to match inflation.

In Australia, the superannuation guarantee rate is set to rise by 12% in 2025, meaning employers will now face higher payroll costs due to this mandatory contribution increase. In addition, retail changes to penalty rates under various awards have increased costs for weekend and public holiday shifts. Full and part-time employees covered by the General Retail Industry Award have experienced phased increases in penalty rates for Saturday shifts.

In New Zealand, the Employers' KiwiSaver minimum contributions remain at 3%, however increasing wages mean contributions for employers are now higher than before. Sick pay and holiday-related pay have also increased, with sick leave entitlement doubling from 5 to 10 days and an additional statutory holiday, Matariki, being added to the calendar year. These changes are driving up the costs of absenteeism of staff.

While retailers are bracing for a surge in staff operational costs this year, 40% of CFOs reported that automation in the finance department has led to a reduction in hiring and decisions not to fill vacant positions. A survey by PWC revealed that globally, 87% of CEOs plan to adopt AI within the next 12 months to tackle these challenges.

The challenges that lead to increase recruitment

As retailers grow, so too does the workload on the finance team. This forces businesses to hire more staff to manage the increase in invoice processing. Manual data entry can take up to anywhere between 5 and 15 minutes per invoice!

As well as mounting invoices, 87% of finance professionals reported an expanded scope of their work, taking on new responsibilities as the organisation grew. These included a focus on data analysis, the management and integration of new systems and taking on an advisory role for business strategy.

Seasonal fluctuations are common in retail and present a short-term need for more staff. On average, retailers tend to increase their workforce by 10-20% during peak times. However, the significant cost associated with these recruitment campaigns including the time and cost to train temporary staff is not sustainable.

Another seasonal issue lies in the increase of fraudulent activity. While retailers are busy trying to manage a mounting workload, fraudulent invoices often slip through the net and in 2019 LexisNexis True Cost of Fraud report estimated that invoice fraud cost Australian retailers £2.2 billion annually. Finance teams are becoming increasingly aware of fraud and have increased staffing numbers as a way of combating the issue.

A sustainable solution: Automation of the finance department

Whilst it is an automatic reaction to tackle increasing workloads with greater manpower, thinking strategically can deliver more sustainable solutions.

Think of questions for an accounts assistant interview. What key skills are essential to the job role? Numerical accuracy and attention to detail are the two most sought-after skills by employers for accounts assistants.

However, there is always a risk of human error when processing data manually.

The introduction of automation enables the finance team to focus on their expanded responsibilities, delivering more value to the business.

As well as helping protect against fraudulent invoice activity, financial automation platforms are scalable, meaning they can absorb the additional workload and risk involved in seasonal fluctuations. With flexible plans to accommodate consumer demands and automatic fraud detection features, automation of finance department tasks ensures your team is prepared for future peaks and can tackle them with confidence.

As wages rise and staff retention becomes more challenging, finance management should look to upskill their employees and provide attractive career development paths to encourage loyalty. Recent research indicated that 88% of employers in the accounting sector are experiencing skills shortages. By introducing AP automation software into the retail industry, employees expand their knowledge which in turn creates higher job satisfaction.

The key takeaways

To answer the burning question of a CFO: Recruit or automate? 87% of CEOs plan to invest in automation rather than hire. That percentage gives a clear indication of how retail businesses plan to move to a more sustainable solution.

Some still fear that automation will outright replace the need for people in finance roles, however, it is clear to see that the role of a finance professional is evolving rather than being replaced. Finance teams now have the opportunity to drive strategic business decisions through data analytics and forecasting rather than repetitively entering cost centre codes and nominals to line items.

Becoming more efficient with fewer people is the goal for retailers in 2025. AP automation for the retail industry will be a key part of achieving this goal.